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<SEC-DOCUMENT>0001206212-07-000063.txt : 20070314
<SEC-HEADER>0001206212-07-000063.hdr.sgml : 20070314
<ACCEPTANCE-DATETIME>20070314142811
ACCESSION NUMBER:		0001206212-07-000063
CONFORMED SUBMISSION TYPE:	40-F
PUBLIC DOCUMENT COUNT:		44
CONFORMED PERIOD OF REPORT:	20070314
FILED AS OF DATE:		20070314
DATE AS OF CHANGE:		20070314

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BCE INC
		CENTRAL INDEX KEY:			0000718940
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
		IRS NUMBER:				99999999
		STATE OF INCORPORATION:			A8
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		40-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08481
		FILM NUMBER:		07693258

	BUSINESS ADDRESS:	
		STREET 1:		1000 DE LA GAUCHETIERE OUEST
		STREET 2:		BUREAU 4100 MONTREAL
		CITY:			QUEBEC CANADA
		STATE:			A8
		ZIP:			H3B 4Y7
		BUSINESS PHONE:		5143977000

	MAIL ADDRESS:	
		STREET 1:		1000 DE LA GAUCHETIERE OUEST
		STREET 2:		BUREAU 4100 MONTREAL
		CITY:			QUEBEC CANADA
		STATE:			A8
		ZIP:			H3B 4Y7

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BELL CANADA ENTERPRISES INC
		DATE OF NAME CHANGE:	19880111
</SEC-HEADER>
<DOCUMENT>
<TYPE>40-F
<SEQUENCE>1
<FILENAME>m35148ore40vf.htm
<DESCRIPTION>FORM 40-F
<TEXT>
<HTML>
<HEAD>
<TITLE>e40vf</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>







<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>2006</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>

</DIV>
<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>U.S. Securities and Exchange Commission</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 40-F</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF
1934</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OR</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934</B></TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">For the fiscal year ended: <B>December&nbsp;31, 2006</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Commission File Number: <B>1-8481</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 18pt"><B>BCE Inc.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><I>(Exact name of Registrant as specified in its charter)</I>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><B>Canada</B><BR>
<I>(Jurisdiction of incorporation or organization)</I>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><B>4813</B><BR>
<I>(Primary Standard Industrial Classification Code Number (if applicable))</I>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><B>98-0134477</B><BR>
<I>(I.R.S. Employer Identification Number (if applicable))</I>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><B>1000 rue de La Gaucheti&#232;re Ouest, Bureau 3700, Montr&#233;al, Qu&#233;bec, Canada H3B 4Y7, </B>(<B>514) 397-7000</B><BR>
<I>(Address and telephone number of Registrant&#146;s principal executive offices)</I>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><B>CT Corporation System, 111 Eighth Avenue, 13<SUP>th</SUP> Floor, New York, N.Y. 10011, (212)&nbsp;894-8940</B><BR>
<I>(Name, address (including zip code) and telephone number (including area code)<BR>
of agents for service in the United States)</I>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section 12(b) of the Act:

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Title of each class<BR>
<B>Common shares</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Name of each exchange on which registered<BR>
<B>New York Stock Exchange</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section 12(g) of the Act: <B>None</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: <B>None</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For annual reports, indicate by check mark the information filed with this Form:

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#254;</FONT> Annual information form
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#254;</FONT> Audited annual financial statements</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Indicate the number of outstanding shares of each of the issuer&#146;s classes of capital or common
stock as of the close of the period covered by the annual report.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><B>At December&nbsp;31, 2006, 807,643,941 common shares and<BR>
66,000,000 First Preferred Shares were issued and outstanding.</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Indicate by check mark whether the Registrant by filing the information contained in this Form is
also thereby furnishing the information to the Commission pursuant to Rule&nbsp;12g3-2(b) under the
Securities Exchange Act of 1934 (the &#147;Exchange Act&#148;). If &#147;Yes&#148; is marked, indicate the file number
assigned to the Registrant in connection with such Rule.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">YES: <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">NO: <FONT face="Wingdings">&#254;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Indicate by check mark whether the Registrant (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Exchange Act during the preceding 12&nbsp;months (or for such shorter period
that the Registrant was required to file such reports) and (2)&nbsp;has been subject to such filing
requirements for the past 90&nbsp;days.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">YES: <FONT face="Wingdings">&#254;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">NO: <FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">







<P align="right" style="font-size: 10pt"><!-- Folio -->2



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PRIOR FILINGS MODIFIED AND SUPERSEDED</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&#146;s (&#147;BCE&#148;) annual report on Form 40-F for the year ended December&nbsp;31, 2006, at the
time of filing with the U.S. Securities and Exchange Commission (the &#147;SEC&#148; or &#147;Commission&#148;),
modifies and supersedes all prior documents filed pursuant to Sections&nbsp;13, 14 and 15(d) of the
Exchange Act for purposes of any offers or sales of any securities after the date of such filing
pursuant to any registration statement or prospectus filed pursuant to the Securities Act of 1933
which incorporates by reference such annual report on Form 40-F.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other than:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Annual Information Form of BCE for the year ended December&nbsp;31, 2006 (the &#147;AIF&#148;) included herein;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>BCE&#146;s annual audited consolidated financial statements for the year ended December&nbsp;31, 2006 and the related
management&#146;s discussion and analysis of financial condition and results of operations included in the Bell Canada
Enterprises 2006 Annual Report to shareholders attached hereto as Exhibit&nbsp;99.1 (the &#147;BCE 2006 Annual Report&#148;);</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the reports of BCE&#146;s management and of BCE&#146;s external auditors on the annual audited consolidated financial statements
for the year ended December&nbsp;31, 2006 included in the BCE 2006 Annual Report;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the reports of BCE&#146;s management and of BCE&#146;s external auditors concerning internal control over financial reporting
included in the BCE 2006 Annual Report; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>BCE&#146;s Reconciliation of Canadian GAAP to United States GAAP attached hereto as Exhibit&nbsp;99.3 and the related report of
BCE&#146;s external auditors attached hereto as Exhibit&nbsp;99.4;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">no other information from the Exhibits attached hereto is to be incorporated by reference in a
registration statement or prospectus filed by BCE pursuant to the Securities Act of 1933.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND<BR>
MANAGEMENT&#146;S DISCUSSION AND ANALYSIS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>A.&nbsp;&nbsp;&nbsp;Annual Audited Consolidated Financial Statements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For BCE&#146;s annual audited consolidated financial statements for the year ended December&nbsp;31,
2006 (the &#147;Financial Statements&#148;), including the external auditors&#146; report with respect thereto,
see pages 65 to 105 and part of page 64, respectively, of the BCE 2006 Annual Report, which pages
are incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>B.&nbsp;&nbsp;&nbsp;Management&#146;s Discussion and Analysis</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For management&#146;s discussion and analysis of financial condition and results of operations for
the year ended December&nbsp;31, 2006 (&#147;MD&#038;A&#148;), see
pages 2 to 61 and 106 and 107 of the BCE 2006 Annual Report, which
pages are incorporated herein by reference.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><!-- Folio -->3



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECONCILIATION OF CANADIAN GAAP TO UNITED STATES GAAP</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Refer to the document entitled &#147;Reconciliation of Canadian GAAP to United States GAAP&#148;
reconciling the significant differences between Canadian and United States generally accepted
accounting principles attached hereto as Exhibit&nbsp;99.3, which is incorporated herein by reference,
and to the external auditors&#146; report with respect thereto attached hereto as Exhibit&nbsp;99.4, which is
also incorporated herein by reference.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DISCLOSURE CONTROLS AND PROCEDURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our disclosure controls and procedures are designed to provide reasonable assurance that
information is accumulated and communicated to management, including BCE&#146;s President and Chief
Executive Officer (CEO)&nbsp;and Chief Financial Officer (CFO), to allow timely decisions regarding
required disclosure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2006, an evaluation of the effectiveness of our disclosure controls and
procedures, as defined in Rule&nbsp;13a-15(e) under the <I>U.S. Securities Exchange Act of 1934 </I>and under
<I>Multilateral Instrument 52-109 </I>adopted by the Canadian Securities Administrators, was carried out
under the supervision of and with the participation of management, including the President and CEO
and the CFO. Based on that evaluation, the President and CEO and the CFO concluded that the design
and operation of our disclosure controls and procedures were effective as at December&nbsp;31, 2006 and
ensure that information is recorded, processed, summarized and reported within the time periods
specified under U.S. and Canadian securities laws.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INTERNAL CONTROL OVER FINANCIAL REPORTING</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>A. Management&#146;s report on internal control over financial reporting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The report of BCE&#146;s management entitled &#147;Management&#146;s Report On Internal Control Over Financial
Reporting&#148; appearing at page 62 of the BCE 2006 Annual Report is incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>B. Auditors&#146; report on internal control over financial reporting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The report of BCE&#146;s external auditors concerning BCE&#146;s internal control over financial reporting
appearing at page 63 of the BCE 2006 Annual Report is incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>C. Changes in internal control over financial reporting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No changes were made in our internal control over financial reporting during the year ended
December&nbsp;31, 2006 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>STATEMENT REGARDING CONTROLS AND PROCEDURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There can be no assurance that our disclosure controls and procedures will detect or uncover all
failures to disclose all material information otherwise required to be set forth in our disclosure.
Further, a control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance with respect to the reliability of financial reporting and financial
statement preparation. Accordingly, BCE does not expect that BCE&#146;s internal control over financial
reporting will prevent or detect all errors and all fraud. BCE will continue to periodically
review its disclosure controls and procedures and internal control over financial reporting and may
make modifications from time to time as considered necessary or desirable.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><!-- Folio -->4



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AUDIT COMMITTEE FINANCIAL EXPERT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE&#146;s board of directors has determined that at least one of the members of the audit
committee, being the Chair of the audit committee, Mr.&nbsp;T.C. O&#146;Neill, is qualified as &#147;audit
committee financial expert&#148;, and that all members of the audit committee are independent under the
listing standards of the New York Stock Exchange.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CODE OF ETHICS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of BCE&#146;s employees, directors and officers must follow the Bell Canada Enterprises Code of
Business Conduct (the &#147;Code of Conduct&#148;), which provides guidelines for ethical behaviour. The Code
of Conduct includes additional guidelines for BCE&#146;s executive officers, including the President and
CEO, CFO, Controller and Treasurer. The Code of Conduct is available in the governance section of
BCE&#146;s website at <U>www.bce.ca</U>.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PRINCIPAL ACCOUNTANT FEES AND SERVICES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Auditors&#146; fees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below shows the fees that BCE&#146;s external auditors, Deloitte &#038; Touche LLP, billed to
BCE and its subsidiaries for various services for each year in the past two fiscal years. Fees for
audit services increased in 2006 primarily due to additional audit work on internal control over
financial reporting as a result of the requirements of the Sarbanes-Oxley Act.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><I>(millions)</I></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-related fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TOTAL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">19.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">13.1</TD>
    <TD nowrap>*</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Restated to exclude fees billed to BCE for work related<BR>
to CTVGlobemedia Inc. (formerly BellGlobemedia Inc.)</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Audit fees</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These fees include professional services provided by the external auditors for the review of
the interim financial statements, statutory audits of the annual financial statements, the audit of
the effectiveness of internal control over financial reporting, the review of prospectuses, the
review of financial accounting and reporting matters, other regulatory audits and filings and
translation services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Audit-related fees</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These fees relate to non-statutory audits, Sarbanes-Oxley Act initiatives, due diligence,
pension plan audits and the review of financial accounting and reporting matters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Tax fees</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These fees include professional services for tax compliance, tax advice and assistance with
tax audits and appeals. Prior to October&nbsp;2005, these fees included fees for services with respect
to compliance with our conflict of interest policy for senior management, which services are no
longer provided by the external auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Other fees</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These fees include any other fees for permitted services not included in any of the
above-stated categories. No such services were provided in the last two fiscal years.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><!-- Folio -->5




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Auditor Independence Policy</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE&#146;s Auditor Independence Policy is a comprehensive policy governing all aspects of BCE&#146;s
relationship with the external auditors, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>establishing a process for determining whether various audit and other services
provided by the external auditors affect their independence;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>identifying the services that the external auditors may and may not provide to BCE and its subsidiaries;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pre-approving all services to be provided by the external auditors of BCE and its subsidiaries; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>establishing a process outlining procedures when hiring current or former personnel
of the external auditors in a financial oversight role to ensure auditor independence is
maintained.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In particular, the policy specifies that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the external auditors cannot be hired to provide any services falling within the
prohibited services category, such as bookkeeping, financial information system design
and implementation and legal services;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>for all audit or non-audit services falling within the permitted services category
(such as prospectus work, due diligence and non-statutory audits), a request for
approval must be submitted to the audit committee by the CFO prior to engaging the
external auditors;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>specific permitted services however are pre-approved quarterly by the audit
committee and consequently only require approval by the CFO prior to engaging the
external auditors; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
     <TD width="1%">&nbsp;</TD>
   <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at each regularly scheduled audit committee meeting, a consolidated summary of all
fees paid to the external auditors by service type is presented. This summary includes
a breakout of fees incurred within the pre-approved amounts.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Auditor Independence Policy is available in the governance section of BCE&#146;s website at
<U>www.bce.ca</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2005 and 2006, BCE&#146;s audit committee did not approve any audit-related, tax or other
services pursuant to paragraph (c) (7) (i) (C)&nbsp;of Rule&nbsp;2-01 of Regulation&nbsp;S-X.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OFF-BALANCE SHEET ARRANGEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please see the sections entitled &#147;Off-Balance Sheet Arrangements&#148; and &#147;Derivative Instruments&#148;
at page 38 of BCE&#146;s MD&#038;A (which is incorporated by reference in BCE&#146;s AIF) and Notes 11, 22 and 27,
entitled &#147;Accounts Receivable&#148;, &#147;Financial Instruments&#148; and &#147;Guarantees&#148;, respectively, of the
Financial Statements, all contained in the BCE 2006 Annual Report, for a discussion of off-balance
sheet arrangements.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please see the section entitled &#147;Contractual Obligations&#148; at pages 37 and 38 of BCE&#146;s MD&#038;A
(which is incorporated by reference in BCE&#146;s AIF), contained in the BCE 2006 Annual Report, for a
tabular disclosure and discussion of contractual obligations.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>IDENTIFICATION OF THE AUDIT COMMITTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE has a separately designated standing audit committee established in accordance with
section 3(a)(58) (A)&nbsp;of the Exchange Act. BCE&#146;s audit committee is comprised of five independent
members: Mr.&nbsp;T.C. O&#146;Neill (Chair), Mr.&nbsp;A. B&#233;rard, Mr.&nbsp;A.S. Fell, Ms.&nbsp;J. Maxwell and Mr.&nbsp;V.L. Young.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>UNDERTAKING</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE undertakes to make available, in person or by telephone, representatives to respond to
inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the
Commission staff, information relating to: the securities in relation to which the obligation to
file this annual report on Form 40-F arises; or transactions in said securities.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><!-- Folio -->6




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WEB SITE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any reference to BCE&#146;s website on the World Wide Web in this annual report on
Form 40-F, in the AIF or in the documents attached as Exhibits hereto, the information contained in
BCE&#146;s website or any other site on the World Wide Web referred to in BCE&#146;s website is not a part of
this annual report on Form 40-F and, therefore, is not filed with the Commission.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE has made in the documents filed as part of this annual report on Form 40-F, and from time
to time may otherwise make, forward-looking statements and related assumptions concerning its
operations, economic performance and financial matters. BCE is under no duty to update any of
these forward-looking statements or related assumptions. Actual results or events could differ
materially from those set forth in, or implied by, the forward-looking statements and the related
assumptions due to a variety of factors. Reference is made to the section entitled &#147;About
forward-looking statements&#148; on page 3 of the AIF and to the section entitled &#147;Assumptions and Risks
underlying our Forward-Looking Statements&#148; on pages 41 to 47 of the AIF for a discussion of certain
of such assumptions and risk factors. Reference is also made to the various assumptions and risk
factors discussed throughout the AIF and MD&#038;A (which is incorporated by reference in BCE&#146;s AIF),
contained in the BCE 2006 Annual Report, including in particular to the sections of BCE&#146;s AIF
entitled &#147;The Competitive Environment we operate in&#148; and &#147;The Regulatory Environment we operate in&#148;
on pages 28 to 36 of the AIF.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>





<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 14pt; margin-top: 6pt; margin-left: 50%"><B>2006</B>

</DIV>

<DIV align="left" style="font-size: 14pt; margin-top: 0pt; margin-left: 50%"><B>Annual</B>

</DIV>

<DIV align="left" style="font-size: 14pt; margin-top: 0pt; margin-left: 50%"><B>Information</B>

</DIV>

<DIV align="left" style="font-size: 14pt; margin-top: 0pt; margin-left: 50%"><B>Form</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 50%"><B>BCE
Inc.</B></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">
For the year ended December&nbsp;31, 2006</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">
March&nbsp;7, 2007

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="m35148orm3514800.gif" alt="(BELL CANADA ENTERPRISES LOGO)">
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">What&#146;s <B>inside</B>
</DIV>

<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101"> About this Annual Information Form</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#102">Documents incorporated by reference</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#103">Trademarks</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">3</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#104">About forward-looking statements</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">4</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">About BCE</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">5</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#106">Our corporate structure</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">5</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#107">Our directors and officers</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">8</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#108">Our employees</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">9</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#109">Our capital structure</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">17</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#110">Our dividend policy</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">17</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#111">Our policy on corporate responsibility</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">18</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#112">Business highlights</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">22</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#113">About our Businesses</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">22</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#114">Our strategic priorities</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">24</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#115">Bell Canada</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">27</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#116">Other BCE segment</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">28</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#117">The Competitive Environment we operate in</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">31</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#118">The Regulatory Environment we operate in</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">31</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#119">Legislation that governs our business</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">33</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#120">Key regulatory issues</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">36</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#121">Consultations</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">37</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#122">Legal Proceedings we are involved in</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">41</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#123">Assumptions and Risks underlying our Forward-Looking Statements</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">48</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#124">Management&#146;s Discussion and Analysis</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">49</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#125">For more Information</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">50</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#126">Schedule&nbsp;1 &#151; Audit Committee Information</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">52</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#127">Schedule&nbsp;1A &#151; Audit Committee Charter</A></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">56</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#128">Schedule&nbsp;2 &#151; Glossary</A></DIV></TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="m35148orexv99w1.htm">Annual Report</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="m35148orexv99w2.htm">Consent of Independent Chartered Accountants</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="m35148orexv99w3.htm">Reconciliation of Canadian GAAP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="m35148orexv99w4.htm">Report of Independent Chartered Accountants</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="m35148orexv99w31.htm">Certifications of the CEO and the CFO</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="m35148orexv99w32.htm">Certifications of the CEO and the CFO</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | &nbsp;&nbsp;1
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt; margin-left:0%">About this <B>Annual Information Form</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Annual Information Form (AIF)&nbsp;contains important information that will help you
make informed decisions about investing in BCE Inc. It describes the company and its
operations, its prospects, risks and other factors that affect its business.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><b>In this AIF, <I>we, us, our, company </I>and <I>BCE </I>mean BCE Inc., its subsidiaries, joint ventures and
associated companies. References to Bell Aliant include matters relating to, and actions taken
by, both Aliant Inc. (Aliant) and its affiliated entities prior to July&nbsp;7, 2006, and Bell
Aliant Regional Communications Income Fund and its affiliated entities, on and after such
date.</b>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><b>All dollar figures are in Canadian dollars, unless stated otherwise. The information in
this AIF is as of March&nbsp;7, 2007, unless stated otherwise, and except for information in
documents incorporated by reference that have a different date.</b>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><b>The meanings of certain capitalized terms used in this AIF can be found in the Glossary which
is in Schedule&nbsp;2 of this AIF.</b>
</DIV>
<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Documents incorporated by reference
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The document in the table below contains information that is incorporated by reference in this
AIF.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">DOCUMENT</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">WHERE IT IS INCORPORATED IN THIS AIF</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bell Canada Enterprises 2006 Annual Report
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Management&#146;s Discussion and
Analysis</I>, page 48</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#151; <I>Management&#146;s Discussion and
Analysis </I>pages 2 to 61</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our annual report is available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov and on BCE
Inc.&#146;s website at www.bce.ca.
</DIV>

<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Trademarks
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below is a list of our trademarks that are referred to and used as such in this AIF
and their owners.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">OWNER</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">TRADEMARK </TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bell Aliant Regional Communications, Limited Partnership
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Aliant</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Bell Aliant LP)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Aliant Telecom</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Aliant Mobility</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">BCE Inc.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">BCE</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bell Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rings &#038; head design</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bell Canada Enterprises corporate logo</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bell</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bell Mobility</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bell World</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Espace Bell</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sympatico</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sympatico.ca</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10-4 &#038; design</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bell ExpressVu Limited Partnership
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">ExpressVu</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bell Mobility Inc.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mobile Browser</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Solo Branding Inc.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Solo<BR>
Solo Mobile</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Telesat Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Anik</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Nimiq</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telesat</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any other trademarks, or corporate, trade or domain names used in this AIF are the property of
their owners. We believe that our trademarks are very important to our success. Our exclusive
trademark rights are perpetual provided that their registrations are timely renewed and that the
trademarks are used in commerce by us or our licensees. We take appropriate measures to protect,
renew and defend our trademarks. We also spend considerable time and resources overseeing,
registering, renewing, licensing and protecting our trademarks and prosecuting those who infringe
on them. We take great care not to infringe on the intellectual property and trademarks of others.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2&nbsp;&nbsp;| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">About forward-looking statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities laws encourage companies to disclose forward-looking information so that investors
can get a better understanding of the company&#146;s future prospects and make informed investment
decisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This AIF contains forward-looking statements about BCE&#146;s objectives, plans, strategies, financial
condition, results of operations, cash flows and businesses. A statement we make is forward-looking
when it uses what we know and expect today to make a statement about the future. Forward-looking
statements may include words such as <I>anticipate, assumption, believe, could, expect, goal,
guidance, intend, may, objective, outlook, plan, seek, should, strive, target </I>and <I>will. </I>These
statements are forward-looking because they are based on our current expectations, estimates and
assumptions about the markets we operate in, the Canadian economic environment and our ability to
attract and retain customers and to manage network assets and operating costs. All such
forward-looking statements are made pursuant to the &#145;safe harbor&#146; provisions of the <I>United States
Private Securities Litigation Reform Act of 1995 </I>and of any applicable Canadian securities
legislation. It is important to know that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">

<TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>unless otherwise indicated, forward-looking statements in this AIF describe our expectations
at March&nbsp;7, 2007.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our actual results could differ materially from what we
expect if known or unknown risks
affect our business, or if our estimates or assumptions turn out to be inaccurate. As a
result, we cannot guarantee that any forward-looking statement will materialize and,
accordingly, you are cautioned not to place undue reliance on these forward-looking
statements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>except as otherwise indicated by BCE, forward-looking statements do not take into account the
effect that transactions or non-recurring or other special items announced or occurring after
the statements are made may have on our business. Such statements do not, unless otherwise
specified by BCE, reflect the impact of dispositions, sales of assets, monetizations, mergers,
acquisitions, other business combinations or transactions, asset write-downs or other charges
announced or occurring after forward-looking statements are made. The financial impact of
these transactions and non-recurring and other special items can be complex and depends on the
facts particular to each of them. We therefore cannot describe the expected impact in a
meaningful way or in the same way we present known risks affecting our business.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we disclaim any intention and assume no obligation to update or revise any forward-looking
statement even if new information becomes available, as a result of future events or for any
other reason.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A number of assumptions were made by BCE in making forward-looking statements in this AIF, such as
certain Canadian economic and market assumptions, operational and financial assumptions, and
assumptions about transactions. Certain factors that could cause results or events to differ
materially from our current expectations include, among others, our ability to implement our
strategies and plans, the intensity of competitive activity and the ability to achieve customer
service improvement while significantly reducing costs. Assumptions made in the preparation of
forward-looking statements and risks that could cause our actual results to differ materially from
our current expectations are discussed throughout this AIF and, in particular, in the section
entitled <I>Assumptions and Risks underlying our Forward-Looking Statements. </I>Important additional
risks and assumptions are also discussed under the sections entitled <I>The Competitive Environment we
operate in </I>and <I>The Regulatory Environment we operate in.</I>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|&nbsp;&nbsp;3
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">About <B>BCE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE is Canada&#146;s largest communications company. Bell Canada, which encompasses our
core business operations, is the nation&#146;s leading provider of wireline and wireless communications
services, Internet access, data services and video services to residential and business customers.
At December&nbsp;31, 2006, we reported Bell Canada&#146;s results of operations in four segments, each
reflecting a distinct customer group: <I>Residential, Business, Bell Aliant, </I>and <I>Other Bell Canada.</I>
All of our other activities were reported in the <I>Other BCE </I>segment. Our reporting structure
reflects how we managed our business in financial year 2006 and how we classified our operations
for planning and measuring performance. Starting in the third quarter of 2006, our segment
reporting was modified to reflect the formation of Bell Aliant and it is reported as a separate
segment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, we had consolidated operating revenues of $17.7&nbsp;billion. We had total assets of $37.0
billion and 54,434 employees at December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below shows the operating revenues that each segment contributed to total operating
revenues for the year ended December&nbsp;31, 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">OPERATING REVENUES (IN $ MILLIONS)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</b></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2005</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right"><b>$</b></TD>
    <TD align="right"><b>7,099</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,016</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right"><b>$</b></TD>
    <TD align="right"><b>6,057</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,966</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right"><b>$</b></TD>
    <TD align="right"><b>3,358</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,320</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right"><b>$</b></TD>
    <TD align="right"><b>1,592</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,651</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Inter-segment eliminations &#151; Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><b>$</b></TD>
    <TD align="right"><b>(758</b></TD>
    <TD nowrap><b>)</b></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(719</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right"><b>$</b></TD>
    <TD align="right"><b>17,348</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,234</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other BCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right"><b>$</b></TD>
    <TD align="right"><b>535</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">538</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Inter-segment eliminations &#151; other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><b>$</b></TD>
    <TD align="right"><b>(170</b></TD>
    <TD nowrap><b>)</b></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(167</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total operating revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right"><b>$</b></TD>
    <TD align="right"><b>17,713</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Residential </I>segment provides local telephone, long distance, wireless, Internet access,
video and other services to Bell Canada&#146;s residential customers, mainly in urban Ontario and
Qu&#233;bec. Wireless services and video services are provided nationwide.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Local telephone and long distance services are sold under the Bell brand, wireless services through
Bell Mobility Inc. (Bell Mobility), Internet access under the Sympatico brand and video services
through Bell ExpressVu Limited Partnership (Bell ExpressVu).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Business </I>segment provides local telephone, long distance, wireless, data (including Internet
access), and information and communications technology (ICT)&nbsp;services to Bell Canada&#146;s large
enterprise (Enterprise) customers and small and medium-sized businesses (SMB)&nbsp;in urban Ontario and
Qu&#233;bec, as well as to business customers in Western Canada through Bell West, our division offering
competitive local exchange carrier (CLEG)&nbsp;services in Alberta and British Columbia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Bell Aliant </I>segment provides local telephone, long distance, data (including Internet access),
and other information technology (IT)&nbsp;and communication services to residential and business
customers in the Atlantic provinces and in rural Ontario and Qu&#233;bec. Bell Aliant combines Bell
Canada&#146;s former regional wireline operations in the less
populated areas of Ontario and Qu&#233;bec with
Aliant&#146;s former wireline, IT and related operations in Atlantic Canada, and also includes Bell
Canada&#146;s former 63.4% interest in NorthernTel, Limited
Partnership (NorthernTel) and T&#233;l&#233;bec,
Limited Partnership (T&#233;l&#233;bec) held indirectly through Bell Nordiq Group Inc. At December&nbsp;31, 2006,
BCE owned approximately 45% of Bell Aliant. The remaining 55% was publicly held. For more details
on the formation of Bell Aliant, see <I>Business highlights &#151; 2006 highlights &#151; Key acquisitions and
dispositions. </I>Also see <I>Our corporate structure </I>for more information regarding our ownership of
Bell Aliant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Other Bell Canada </I>segment includes Bell Canada&#146;s wholesale business, and the financial results
of Northwestel Inc. (Northwestel). Our wholesale business provides local telephone, long distance,
wireless, Internet, data and other services to competitors who resell these services. Northwestel
provides telecommunications services to less populated areas of Canada&#146;s northern territories. At
December&nbsp;31, 2006, Bell Canada owned 100% of Northwestel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Other BCE </I>segment includes the financial results of our satellite businesses, as well as our
corporate office. This segment includes Telesat Canada (Telesat). Telesat provides satellite
communications and systems management and is a consultant in establishing, operating and upgrading
satellite systems worldwide. BCE Inc. owns 100% of Telesat.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;18, 2006, BCE Inc. announced the sale of Telesat to a new company formed by Canada&#146;s
Public Sector Pension Investment Board (PSP Investments) and Loral Space &#038; Communications Inc. for
$3.25&nbsp;billion. The sale is subject to regulatory approval both in Canada and the United States and
other closing conditions including the absence of a material adverse change affecting Telesat&#146;s
business. For more details, see <I>Business highlights &#151; 2006 highlights &#151; Key acquisitions and
dispositions</I> and <I>About our Businesses &#151; Other BCE segment</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A transaction involving the reorganization of the ownership of CTVglobemedia Inc. (CTVglobemedia)
(formerly Bell Globemedia Inc. (Bell Globemedia)) was announced on December&nbsp;2, 2005 and completed
on August&nbsp;30, 2006. As of August&nbsp;31, 2006, we have accounted for CTVglobemedia as a discontinued
operation and no longer consolidate its financial results. Our remaining 15% investment is
accounted for at cost. For more details, see <I>Business highlights &#151; 2006 highlights&nbsp;&#151;&nbsp;Key
acquisitions and dispositions.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. was incorporated in 1970 and was continued under the <I>Canada Business Corporations Act </I>in
1979. It is governed by a Certificate and Articles of Amalgamation dated August&nbsp;1, 2004, by a
Certificate and Articles of Arrangement dated July&nbsp;10, 2006 and by a Certificate and Articles of
Amendment dated January&nbsp;25, 2007. BCE Inc.&#146;s head and registered offices are at 1000, rue de La
Gaucheti&#232;re Ouest, Bureau 3700, Montr&#233;al, Qu&#233;bec H3B 4Y7. BCE Inc.&#146;s auditors are Deloitte &#038;
Touche LLP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. will, at its next annual shareholder meeting, submit a proposal to its shareholders to
change its name to Bell Canada Inc. Bell Canada intends to change its name to Bell Inc. at the same
time as BCE Inc.&#146;s name is changed. For more details, see
<I>Business highlights &#151; 2006 highlights &#151; Strategic announcements.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4&nbsp;&nbsp;|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Our corporate structure
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below shows our main subsidiaries, where they are incorporated or registered, and
the percentage of voting and non-voting securities or partnership interest that we beneficially own
or that we directly or indirectly exercise control or direction over.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have other subsidiaries, but they have not been included in the table because each represents
10% or less of our total consolidated assets and 10% or less of our total consolidated operating
revenues. These other subsidiaries together represented 20% or less of our total consolidated
assets and 20% or less of our total consolidated operating revenues at December&nbsp;31, 2006.<BR>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">PERCENTAGE OF VOTING SECURITIES</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">WHERE IS IT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OR PARTNERSHIP INTEREST THAT </TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">INCORPORATED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BCE INC. HELD AT </TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">SUBSIDIARY</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">OR REGISTERED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">DECEMBER 31, 2006</TD>
    <TD><SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">BellCanada<SUP style="font-size: 85%; vertical-align: text-top">(2) </SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Canada</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Mobility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="left">Canada</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell ExpressVu<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="left">Ontario</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%<SUP style="font-size: 85%; vertical-align: text-top">(4)     </SUP></TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


 <DIV style="MARGIN-TOP: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>We do not own any outstanding non-voting securities issued by these subsidiaries.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>At December&nbsp;31, 2006, all of the voting securities of Bell Canada were owned by Bell
Canada Holdings Inc. (BCH), a wholly-owned subsidiary of BCE Inc. As part of our
corporate simplification process, BCH has been eliminated and since February&nbsp;1, 2007 all
of the voting securities of Bell Canada are directly held by BCE Inc.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>This partnership represents 10% or less of our total consolidated assets and 10% or less of
our total consolidated operating revenues. We have included it to provide a better
understanding of our overall corporate structure.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>This partnership is indirectly wholly-owned by BCE Inc. 52% is indirectly held by Bell Canada.</TD>
</TR>

</TABLE>
 </DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As at December&nbsp;31, 2006, BCE also owned approximately 45% of the voting securities
of Bell Aliant on a fully-diluted basis. For so long as we own a 30% or greater interest in Bell
Aliant and provided that certain major commercial agreements are in place, we have the right to
appoint a majority of the directors and to nominate a majority of the trustees of Bell Aliant. We
also have the ability to veto certain actions of Bell Aliant (business plans, significant corporate
transactions, material changes in business, leverage in excess of 2.5 times debt to earnings before
interest, taxes, depreciation and amortization (EBITDA), appointment and change of Chief Executive
Officer and entering into material commercial agreements with competitors of BCE) as long as we own
a 20% or greater interest in Bell Aliant. For more details, see <I>Business highlights &#151; 2006
highlights &#151; Key acquisitions and dispositions.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;12, 2006, BCE Inc. announced that it intends, at its next annual shareholder meeting,
to submit a proposal to its shareholders to change its name to Bell Canada Inc. In addition, under
a plan of arrangement effective January&nbsp;31, 2007, holders of Bell Canada&#146;s Class&nbsp;A preferred shares
exchanged their preferred shares of Bell Canada for new first preferred shares of BCE Inc. with the
same series rights. For more details, refer to <I>Our capital structure </I>and <I>Business highlights &#151; 2006
highlights &#151; Strategic announcements.</I>
</DIV>

<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Our directors and officers
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below shows the number and percentage of securities BCE Inc.&#146;s directors and
officers as a group beneficially owned, directly or indirectly, or exercised control or direction
over as at December&nbsp;31, 2006:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

    <TD style="border-top: 1px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">BCE Inc.</DIV></TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD  nowrap align="left" valign="top" style="border-top: 1px solid #000000">1,639,571 Common shares</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">0.2030</TD>
    <TD nowrap valign="top" style="border-top: 1px solid #000000">%</TD>
</TR>
<TR valign="bottom">
    <TD style="border-BOTTOM: 1px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Bell Canada International Inc. (BCI)<SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP></DIV></TD>
    <TD style="border-BOTTOM: 1px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-BOTTOM: 1px solid #000000">38 Common shares</TD>
    <TD style="border-BOTTOM: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="left" valign="top" style="border-BOTTOM: 1px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-BOTTOM: 1px solid #000000">0.0001</TD>
    <TD nowrap valign="top" style="border-BOTTOM: 1px solid #000000">%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV STYLE="MARGIN-TOP:3PT">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>As at December&nbsp;31, 2006, BCE Inc. owned approximately 62% of the
outstanding common shares of BCI.</TD>
</TR>

</TABLE>
 </DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As at December&nbsp;31, 2006, BCE Inc.&#146;s directors and officers as a group also beneficially
owned, directly or indirectly, or exercised control or direction over 125,320 units (or
0.0558%) of Bell Aliant Regional Communications Income Fund.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;|&nbsp;&nbsp;5
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below lists BCE Inc.&#146;s directors, where they lived, the date they have been
elected or appointed and their current principal occupation on March&nbsp;7, 2007.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">DIRECTORS</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">NAME AND PROVINCE/STATE AND</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">DATE ELECTED OR APPOINTED</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">COUNTRY OF RESIDENCE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">TO THE BCE INC. BOARD</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">CURRENT PRINCIPAL OCCUPATION </TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Andr&#233; B&#233;rard, O.C., Qu&#233;bec, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;2003
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Corporate director, since March&nbsp;2004</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ronald A. Brenneman, Alberta, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">November&nbsp;2003
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer, Petro-Canada
(petroleum company), since January&nbsp;2000</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Richard J. Currie, O.C.,<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP> Ontario, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;1995
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chair of the board, BCE Inc. and Bell Canada, since April&nbsp;2002</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Anthony S. Fell, O.C.,<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP> Ontario, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;2002
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the board, RBC Dominion Securities Limited
(investment bank), since December&nbsp;1999</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Donna Soble Kaufman, Ontario, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">June&nbsp;1998
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Corporate director (since July&nbsp;1997) and lawyer</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Brian
M. Levitt, Qu&#233;bec, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;1998
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Partner and Co-Chair, Osier, Hoskin &#038; Harcourt LLP (law firm),
since January&nbsp;2001</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">The Honourable Edward C. Lumley, P.C.,<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP> Ontario, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;2003
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice-Chairman, BMO Nesbitt Burns Inc. (investment bank),
since December&nbsp;1991</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Judith Maxwell, C.M., Ontario, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;2000
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Research Fellow, Canadian Policy Research Networks Inc.
(non-profit organization conducting research on work,
family, health, social policy and public involvement),
since February&nbsp;2006</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John H. McArthur, Massachusetts, U.S.A.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;1995
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Dean Emeritus, Harvard University Graduate School
of Business Administration, since 1995</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Thomas C. O&#146;Neill, F.C.A., Ontario, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;2003
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Corporate director (since October&nbsp;2004) and
chartered accountant</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James A. Pattison, O.C., O.B.C.,<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP> British Columbia, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">February&nbsp;2005
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman and Chief Executive Officer, The Jim Pattison Group
(diversified consumer-oriented company), since May&nbsp;1961</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert C. Pozen, Massachusetts, U.S.A.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">February&nbsp;2002
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the board, MFS Investment Management
(global investment manager), since February&nbsp;2004</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Michael J. Sabia,<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP> Qu&#233;bec, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">October&nbsp;2002
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer (since April&nbsp;2002),
BCE Inc., and Chief Executive Officer (since May&nbsp;2002),
Bell Canada</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Paul M. Tellier, PC., C.C., Q.C., Qu&#233;bec, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">April&nbsp;1999
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Corporate director, since December&nbsp;2004</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Victor L. Young, O.C., Newfoundland and Labrador, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;1995
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Corporate director, since May&nbsp;2001</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<div style="margin-top:3pt">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Was a director or executive officer of Teleglobe Inc. or certain of its affiliates on, or
during the year preceding, May&nbsp;15, 2002, the date when Teleglobe Inc. and certain of its
affiliates filed for court protection under insolvency statutes in various countries,
including Canada and the United States.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Was a director or executive officer of Air Canada on, or during the year preceding, April&nbsp;1,
2003, the date when Air Canada filed for court protection under insolvency statutes in Canada
and the United States.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Was a director or executive officer of Livent Inc. on, or during the year preceding,
November&nbsp;18 or 19, 1998, the dates when Livent Inc. and its United States subsidiaries
filed for court protection under insolvency statutes in Canada and the United States,
respectively.</TD>
</TR>

</TABLE>

</div>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">6&nbsp;&nbsp;|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Past occupation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under BCE Inc.&#146;s by-laws, each director holds office until the next annual shareholder
meeting or until his or her successor is elected. All of BCE Inc.&#146;s directors have held the
positions listed in the table on the previous page or other executive positions with the same or
associated firms or organizations during the past five years or more, except for the people listed
in the table below.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">DIRECTOR</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">PAST OCCUPATION</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mr.
A. B&#233;rard
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the board of National Bank of Canada (chartered bank) from March&nbsp;2002 to March&nbsp;2004
<br>Chairman of the board and Chief Executive Officer of National
Bank of Canada from 1990 to March&nbsp;2002 and a director of National Bank of Canada from 1985 to March&nbsp;2004</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mr. R.J. Currie
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and a director of George
Weston Limited (food distribution, retail and production company)
from 1996 to May&nbsp;2002<br>
President and a director of Loblaw Companies Limited (grocery chain) from 1976 to January&nbsp;2001</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ms. J. Maxwell
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Founder and President of Canadian Policy Research Networks Inc. from 1995 to January&nbsp;2006</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mr. T.C. O&#146;Neill
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer of PricewaterhouseCoopers Consulting (provider of management consulting and technology services)
from January&nbsp;2002 to May&nbsp;2002 and then Chairman of the
board from May&nbsp;2002 to October&nbsp;2002<br>
Chief Operating Officer of PricewaterhouseCoopers LLP global organization (professional services firm in accounting, auditing,
taxation and financial advisory services) from July&nbsp;2000 to January&nbsp;2002</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mr. R.C. Pozen
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Visiting professor, Harvard Law School from 2002 to August&nbsp;2004</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mr. P.M. Tellier
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer and a director of Bombardier Inc. (manufacturer of business jets, regional jets and rail
transportation equipment) from 2003 to December&nbsp;2004
President, Chief Executive Officer and a director of Canadian National Railway Company (railroad company) from 1992 to December&nbsp;2002</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Committees of the board</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below lists the committees of BCE Inc.&#146;s board of directors and their
members. As a public company, we are required by law to have an audit committee.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">COMMITTEE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">MEMBERS</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Audit
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">T.C. O&#146;Neill (Chair)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">A. B&#233;rard</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">A.S. Fell</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. Maxwell</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">V.L. Young</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Corporate governance
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">D. Soble Kaufman (Chair)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">A. B&#233;rard</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Honourable E.C. Lumley</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J.H. McArthur</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J.A. Pattison</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Management resources and compensation
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">R.J. Currie (Chair)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">R.A. Brenneman</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">A.S. Fell</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J.H. McArthur</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">R.C. Pozen</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Pension fund
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">R.C. Pozen (Chair)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">R.A. Brenneman</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">B.M. Levitt</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">P.M. Tellier</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">V.L. Young</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|&nbsp;&nbsp;7
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Officers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below lists BCE Inc.&#146;s executive officers, where they lived and the office that
they held at BCE Inc. on March&nbsp;7, 2007.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">NAME</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">PROVINCE AND COUNTRY OF RESIDENCE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">OFFICE HELD AT BCE INC.</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Michael J .Sabia<SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Alain Bilodeau
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice-President, BCE Inc. and President,
BCE Corporate Services</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Michael T.Boychuk<SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice-President and Treasurer</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Karyn A. Brooks
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice-President and Controller</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">William J. Fox
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ontario, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice-President &#151; Communications and
Corporate Development</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Leo W. Houle
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Talent Officer</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lawson A.W. Hunter
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ontario, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice-President and Chief Corporate Officer</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Patricia A. Olah
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Corporate Secretary and Lead Governance Counsel</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">L. Scott Thomson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ontario, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice-President &#151; Corporate Development
and Planning</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wayne L. Tunney
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice-President &#151; Taxation</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Marline Turcotte
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Legal Officer</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Siim A. Vanaselja
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Qu&#233;bec, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nicholas Zelenczuk
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ontario, Canada
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice-President &#151; Audit and Risk Management</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<div style="margin-top:3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Was a director or executive officer of Teleglobe Inc. or certain of its affiliates on or
during the year preceding May&nbsp;15, 2002, the date when Teleglobe Inc. and certain of its
affiliates filed for court protection under insolvency statutes in various countries,
including Canada and the United States.</TD>
</TR>

</TABLE>
 </div>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Past occupation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of our officers have held their present positions or other executive positions with BCE
Inc. or one or more of our subsidiaries during the past five years or more, except for:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">

<TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Bilodeau who was Senior Vice-President, Compensation Practice of AON Consulting
(consulting company) before April&nbsp;2002</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ms.&nbsp;Brooks who was Vice-President and Controller of Enbridge Inc. (pipeline company) before
July&nbsp;2003</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Fox who was Senior Vice-President &#151; Public Affairs of Bombardier Inc. prior to January
2005. He was also Senior Vice-President &#151; Public Affairs of Canadian National Railway Company
before January&nbsp;2003</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Hunter who was a partner with Stikeman Elliott LLP (law firm) before March&nbsp;2003</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Thomson who was Vice-President of Mergers and Acquisitions of Goldman, Sachs &#038; Co. in
both Toronto and New York before January&nbsp;2003</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Tunney who was partner in the Tax Group of KPMG before October&nbsp;2006</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Zelenczuk who was a partner in the Advisory Services Group of KPMG before February&nbsp;2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Our employees
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below shows the number of our employees as at December&nbsp;31, 2006, 2005 and
2004.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">NUMBER OF EMPLOYEES</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">AT DECEMBER 31</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><b>2006</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><b>54,434</b></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">56,044</TD>

<TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,684</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<div style="margin-top:3pt">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes increases due to acquisitions made during the year.</TD>
</TR>

</TABLE>
 </div>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Approximately 46% of our employees are represented by unions and are covered by collective
agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The collective agreements between the Communications, Energy and Paperworkers Union of Canada (CEP)
and Expertech Network Installation Inc. (Expertech) representing approximately 160 clerical and
1,300 craft and services employees have both expired on
November&nbsp;30, 2006. The parties have been in
negotiations since November&nbsp;2006. A first offer by Expertech was rejected by both bargaining units&#146;
employees on December&nbsp;20, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
February&nbsp;26, 2007, the craft and services employees rejected Expertech&#146;s final offer at 64.5%
whereas its clerical employees accepted the offer at 78.3%. Expertech&#146;s craft and services
employees will obtain their right to strike if and once the CEP gives 72-hours notice to Expertech
indicating the date after which a strike will occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a result of this vote, Expertech declared it was unable to restructure its operations and
announced the wind-down of its operations. Bell Canada announced that it would work with Expertech
toward an orderly and timely wind-down of its activities and would transfer its work to many local
suppliers in Qu&#233;bec and Ontario.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;5, 2007, the CEP and Expertech announced that an agreement had been reached on some
refinements to Expertech&#146;s final offer that, if accepted by union members, would allow Expertech to
avoid closure. This offer has been put to a vote by the craft and services employees. The results
will be announced on March&nbsp;19, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of the bargaining process, the CEP filed, in December&nbsp;2006, a single employer and a sale of
business application before the Canada Industrial Relations Board (CIRB)&nbsp;against Bell Canada and
Expertech. Hearings are scheduled in May and June&nbsp;2007. Should the CEP be
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">8&nbsp;&nbsp;|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">successful with these applications, Bell Canada could be bound by the collective agreements
now covering Expertech&#146;s employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">An arbitration decision was received by Expertech in December&nbsp;2006 under which it was ordered to
make the Bell Canada 2004 Voluntary Early Retirement (VER)&nbsp;program available to all employees
covered by the craft and services collective agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following collective agreements were signed in 2006:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the Canadian Telecommunications Employees&#146; Association
(CTEA)&nbsp;and Bell Canada, representing approximately 700 communications sales employees expired
on December&nbsp;31, 2006. A new two-year collective agreement was
signed on December&nbsp;13, 2006. The
new collective agreement will expire on December&nbsp;31, 2008.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the CTEA and Connexim Inc. (Connexim), representing
approximately 200 clerical employees expired on May&nbsp;31, 2006. A new five-year collective
agreement was signed on June&nbsp;1, 2006. The new collective
agreement will expire on May&nbsp;31, 2011.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the Teamsters Qu&#233;bec Local 1999 and T&#233;l&#233;bec representing
approximately 200 technicians expired on July&nbsp;22, 2006. A new collective agreement was signed
on October&nbsp;5, 2006. The new collective agreement will expire on
July&nbsp;22, 2013.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
January&nbsp;21, 2005, the CEP filed a single employer application with the CIRB concerning Bell
Canada, Bell West Inc. (now the Bell West division of Bell Canada), Smiston Communications Inc.
(Smiston) and GT Group Telecom Services Corporation (Group Telecom) to represent the craft and
service employees of Bell West, Smiston and Group Telecom. The parties exchanged written
documentation and a pre-hearing conference took place before the CIRB at the end of 2005. In
December&nbsp;2006, the CEP filed a request for certification to represent approximately 120 employees
of Bell Canada in the Western operations. On February&nbsp;1, 2007, the CEP was certified to represent
129 technicians of Bell Canada in the West. Both parties will meet in mid-March to start the
bargaining process for the signature of a first collective agreement. The CEP has withdrawn its
single employer application that had been filed with the CIRB.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following collective agreements have expired or will expire in 2007:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the CEP and NorthernTel representing approximately 130
craft, clerical and sales employees expired on February&nbsp;28, 2007. Negotiations are scheduled to
begin on April&nbsp;2, 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the CTEA and T&#233;l&#233;bec representing approximately 250 clerical
employees will expire on November&nbsp;1, 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the CEP and Bell Canada representing approximately 6,000
craft and services employees will expire on November&nbsp;30, 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the CEP and Connexim representing approximately 70 craft
employees will expire on November&nbsp;30, 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the CEP and Bell Aliant LP representing approximately 660
craft and services employees in Ontario and Qu&#233;bec will expire on November&nbsp;30, 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings"><B>&#167;</B></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The collective agreement between the CEP and Bell Aliant LP representing approximately 3,500
craft, clerical and operator employees in the four Atlantic provinces will expire on December
31, 2007.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Our capital structure
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section describes BCE Inc.&#146;s and Bell Canada&#146;s securities, the ratings that certain
rating agencies have attributed to such securities and the trading of such securities on the
Toronto Stock Exchange (TSX).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BCE Inc. securities</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s articles, as amended, provide for an unlimited number of common shares, an
unlimited number of first preferred shares issuable in series, an unlimited number of second
preferred shares also issuable in series and an unlimited number of Class&nbsp;B shares. In addition,
BCE Inc. has issued debt securities in the form of notes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BCE Inc. preferred shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The terms set out in the articles authorize BCE Inc.&#146;s directors to issue first and second
preferred shares in one or more series and to set the number of shares and conditions for each
series.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;25, 2007, the articles of BCE Inc. were amended to create the series AE, AF, AG, AH, AI
and AJ first preferred shares. These new series of preferred shares were created in connection with
a plan of arrangement of Bell Canada where all of the issued and outstanding series of preferred
shares of Bell Canada were exchanged for equivalent new first preferred shares of BCE Inc. (BCE new
preferred shares). This plan of arrangement became effective on
January&nbsp;31, 2007. As a result of the
implementation of the plan of arrangement and of the provision by BCE Inc. of certain guarantees of
Bell Canada&#146;s public debt securities effective February&nbsp;1, 2007, Bell Canada no longer has to
prepare and file public disclosure documents separate from those of BCE Inc. For more details, see
<I>Business highlights &#151; 2006 highlights &#151; Strategic announcements.</I>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|&nbsp;&nbsp;9
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below is a summary of the principal terms of BCE Inc.&#146;s first preferred shares
at December&nbsp;31, 2006. There were no second preferred shares issued and outstanding at December
31, 2006. BCE Inc.&#146;s articles describe the terms and conditions of these shares in detail.
</DIV>
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">STATED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">CAPITAL AT</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">DECEMBER 31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" colspan="6" style="border-bottom: 1px solid #000000">NUMBER OF SHARES</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" colspan="6" style="border-bottom: 1px solid #000000">(IN $ MILLIONS)</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">ANNUAL</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">DIVIDEND</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">CONVERTIBLE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">CONVERSION</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">REDEMPTION</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">REDEMPTION</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ISSUED AND</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">SERIES</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">RATE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">INTO</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">DATE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">DATE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">PRICE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AUTHORIZED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OUTSTANDING</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Q</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">floating</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series R</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>December 1, 2015</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>&#151;</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">R</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4.54%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series Q</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December 1, 2010</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December 1, 2010</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>200</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">200</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">floating</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series T</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>November 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,279,791</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>57</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">200</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">T</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4.502%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series S</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>November 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>November 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5,720,209</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>143</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#150;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Y</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">floating</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series Z</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,147,380</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>29</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">29</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Z</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.319%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series Y</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>December 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8,852,620</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>221</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">221</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="top" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.45%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series AB</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>September 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD align="left" nowrap valign="top">September 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>510</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">510</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AB</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">floating</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series AA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September 1, 2012</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>&#151;</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5.54%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series AD</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March 1, 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March 1, 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>510</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">510</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">floating</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series AC</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March 1, 2013</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>&#151;</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>1,670</B></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,670</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Voting rights</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of the issued and outstanding preferred shares are non-voting, except under special
circumstances, for example if BCE Inc. fails to make dividend payments, then the holders are
entitled to one vote per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Entitlement to dividends</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Holders of Series&nbsp;R, T, Z, AA and AC shares are entitled to fixed cumulative quarterly dividends.
The dividend rate on these shares is reset every five years, as set out in BCE Inc.&#146;s articles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Holders of Series&nbsp;S and Y shares are entitled to floating adjustable cumulative monthly dividends.
The floating dividend rate on these shares is calculated every month, as set out in BCE Inc.&#146;s
articles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If Series&nbsp;Q, AB and AD shares are issued, their holders will be entitled to floating adjustable
cumulative monthly dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Conversion features</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of the issued and outstanding preferred shares are convertible at the holder&#146;s option into
another associated series of preferred shares on a one-for-one basis according to the terms set out
in BCE Inc.&#146;s articles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Redemption features</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. may redeem Series&nbsp;R, T, Z, AA and AC shares on the redemption date and every five years
after that date should such shares be outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. may redeem Series&nbsp;S and Y shares at any time at $25.50 per share. If Series&nbsp;Q, AB and AD
shares are issued, BCE Inc. may redeem them at any time at $25.50 per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liquidation, dissolution or winding up</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The first preferred shares of all series rank on a parity with each other and in priority to all
other shares of BCE Inc. with respect to payment of dividends and with respect to distribution of
assets in the event of liquidation, dissolution or winding up of BCE Inc., whether voluntary or
involuntary, or any other distribution of assets for the purpose of winding up its affairs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The second preferred shares of all series rank on a parity with each other and after the first
preferred shares and in priority to all other shares of BCE Inc. with respect to payment of
dividends and with respect to distribution of assets in the event of liquidation, dissolution or
winding up of BCE Inc., whether voluntary or involuntary, or any other distribution of assets for
the purpose of winding up its affairs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BCE Inc. common shares and Class&nbsp;B shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s articles of amalgamation provide for an unlimited number of voting common shares and
non-voting Class&nbsp;B shares. Each common share entitles its holder to one vote at any meeting of
shareholders. The common shares and the Class&nbsp;B shares rank equally in the payment of dividends and
in the distribution of assets if BCE Inc. is liquidated, dissolved or wound up, after payments due
to the holders of preferred shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides details about the outstanding common shares of BCE Inc. at December
31, 2006 and 2005. No Class&nbsp;B shares were outstanding at December&nbsp;31, 2006 and 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">10 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>

<TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">STATED CAPITAL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">STATED CAPITAL</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SHARES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">(IN <B>$ </B>MILLIONS)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SHARES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">(IN <B>$ </B>MILLIONS)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>927,318,916</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,806</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">925,935,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,781</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shares issued under employee stock option plan<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,246,932</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>35</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,383,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shares repurchased and cancelled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(45,151,666</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(805</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Share reduction<SUP style="font-size: 85%; vertical-align: text-top">(2) </SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(75,770,241</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,549</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>807,643,941</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,487</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">927,318,916</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,806</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="margin-top: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes a $6 million reclassification from contributed surplus relating to the exercise of
employees&#146; stock options.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Reduction of BCE Inc. common shares outstanding, in conjunction with a distribution of Bell
Aliant fund units, by way of return of capital, to holders of BCE Inc. common shares.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are ownership constraints on BCE Inc.&#146;s common shares. For more details, see <I>The
Regulatory Environment we operate in &#151; Legislation that governs our business.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BCE Inc. debt securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;28, 2006, BCE Inc. redeemed all of its outstanding 6.75% Series&nbsp;B Notes due October&nbsp;30,
2007 in the principal amount of $1.050&nbsp;billion at a price equal to $1,017.210 per $1,000 Notes plus
$10.911 for accrued and unpaid interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. has issued long-term debt securities as summarized in the table below which remain
outstanding.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">INTEREST</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">RATE</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">MATURITY</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">$ MILLIONS</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Series&nbsp;C Notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.35</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="center">October 30, 2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Series&nbsp;C Notes issued by BCE Inc. are unsecured. BCE Inc. has the option to redeem the Series&nbsp;C
Notes at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. has a shelf prospectus providing for the issue of up to $1.0&nbsp;billion of medium term notes
(MTNs). BCE Inc. has not issued any MTNs under its current shelf prospectus which expires on
November&nbsp;10, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The indentures governing the Series&nbsp;C Notes and the MTNs contain certain covenants including, but
not limited to, a negative pledge, and certain events of default including, but not limited to, a
cross-default with respect to Bell Canada&#146;s indebtedness for borrowed money in certain
circumstances. The indenture governing the Series&nbsp;C Notes contains, in particular, a provision
stating that in the event BCE Inc. disposes of voting shares of Bell Canada in such a number as to
hold, directly or indirectly, less than 75% of the voting rights attaching to the outstanding
voting shares of Bell Canada, unless the Series&nbsp;C Notes have an approved rating from each of
certain rating agencies on each day of a rating period, BCE Inc. shall have the obligation to make
an offer to purchase all of the Series&nbsp;C Notes within the five business days following the rating
period at 100% of their face value together with accrued and unpaid interest to the purchase date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. may issue notes under its commercial paper program up to the amount of its supporting
committed lines of credit. The total amount of its supporting committed lines of credit available
was $291&nbsp;million at December&nbsp;31, 2006. BCE Inc. had no commercial paper outstanding at December&nbsp;31,
2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. is in compliance with all conditions and restrictions attaching to its debt securities
described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Bell Canada securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada&#146;s articles of amalgamation, as amended, provide for an unlimited number of common
shares and an unlimited number of preferred shares issuable in series. Bell Canada has also
issued debt securities in the form of debentures and notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Bell Canada Class&nbsp;A preferred shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As at December&nbsp;31, 2006, Bell Canada&#146;s articles provided for an unlimited number of Class&nbsp;A
preferred shares (Bell Canada preferred shares). The terms set out in the articles authorized Bell
Canada&#146;s directors to issue Bell Canada preferred shares in one or more series and to set the
number of shares and conditions for each series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below is a summary of the principal terms of the Bell Canada preferred shares at December
31, 2006. Bell Canada&#146;s articles described the terms and conditions of these shares in detail. For
each of Bell Canada&#146;s Series&nbsp;15 to 20 preferred shares, we have indicated the equivalent Series&nbsp;AE
to AJ of BCE new preferred shares for which the Bell Canada preferred shares were exchanged on
January&nbsp;31, 2007 in connection with the implementation of Bell Canada&#146;s plan of arrangement. The
terms and conditions of the BCE new preferred shares are equivalent to those of Bell Canada
preferred shares described below. For more details on Bell Canada&#146;s plan of arrangement, see <I>Our
capital structure &#151; BCE Inc. securities </I>and <I>Business highlights &#151; 2006 highlights &#151; Strategic
announcements.</I>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | 11
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">STATED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">CAPITAL AT</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">DECEMBER 31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000" colspan="6" align="right">NUMBER OF SHARES</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" colspan="6" style="border-bottom: 1px solid #000000">(IN $ MILLIONS)</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">ANNUAL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">DIVIDEND</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">CONVERTIBLE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">CONVERSION</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">REDEMPTION</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">REDEMPTION</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ISSUED AND</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">SERIES</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">RATE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">INTO</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">DATE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">DATE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">PRICE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AUTHORIZED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OUTSTANDING</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">15 (new AE)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Floating</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Series 16 (new AF)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Feb. 1, 2010</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,914,218</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>48</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">16 (new AF)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4.40%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Series 15 (new AE)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Feb. 1, 2010</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Feb. 1, 2010</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,085,782</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>352</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">352</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">17 (new AG)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4.35%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Series 18 (new AH)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,051,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>251</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">18 (new AH)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Floating</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series 17 (new AG)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,948,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>99</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">19 (new AI)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4.65%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series 20 (new AJ)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>August 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>August 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>350</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">20 (new AJ)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Floating</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series 19 (new AI)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August 1, 2016</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,100</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Voting rights</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of Bell Canada&#146;s issued and outstanding preferred shares at December&nbsp;31, 2006 were non-voting,
except under special circumstances, for example if Bell Canada failed to make dividend payments,
then the holders were entitled to one vote per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Entitlement to dividends</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Holders of Series&nbsp;15 and 18 shares were entitled to floating adjustable cumulative monthly
dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Holders of Series&nbsp;16, 17 and 19 shares were entitled to fixed cumulative quarterly dividends. The
dividend rate on these shares was reset every five years as set out in Bell Canada&#146;s articles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If Series&nbsp;20 shares were issued, their holders would have been entitled to floating adjustable
cumulative monthly dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Conversion features</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of the issued and outstanding Bell Canada preferred shares at December&nbsp;31, 2006 were convertible
at the holder&#146;s option into another associated series of Bell Canada preferred shares on a
one-for-one basis according to the terms set out in Bell Canada&#146;s articles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Redemption features</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada could redeem Series&nbsp;15 and 18 shares at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada could redeem Series&nbsp;16, 17 and 19 shares on the redemption date and every five years
after that date should such shares be outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If Series&nbsp;20 shares had been issued, Bell Canada could have redeemed them at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liquidation, dissolution or winding up</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In case of liquidation, dissolution or winding up of Bell Canada or any other distribution of its
assets among shareholders for the purpose of winding up its affairs, the holders of Bell Canada
preferred shares were entitled to receive all amounts provided in Bell Canada&#146;s articles to be
payable in respect of return of capital, premium and dividends. These amounts were payable before
any amount was paid to or any assets distributed among the holders of common shares or of shares of
any other class ranking junior to the Bell Canada preferred shares. Unless the articles of Bell
Canada otherwise provided with respect to any series of the Bell Canada preferred shares, after
payment to the holders of the
Bell Canada preferred shares of the amounts provided in such articles to be payable to them, such
holders would not be entitled to share in any further distribution of the assets of Bell Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Bell Canada debt securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada has also issued long-term debt securities as summarized in the table below.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">WEIGHTED</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6" style="border-bottom: 1px solid #ffffff">AT DECEMBER 31, 2006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">AVERAGE</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">INTEREST RATE</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">MATURITY</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">(IN $ MILLIONS)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Debentures and notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.87</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2007-2035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,025</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Debentures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.84</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2041-2054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">700</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Subordinated debentures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.21</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2026-2031</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of the above debentures issued by Bell Canada are unsecured and effective February&nbsp;1,
2007 have been guaranteed by BCE Inc. They include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>US$200&nbsp;million maturing in 2010, which has been swapped into Canadian dollars</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$125&nbsp;million of long-term debt with a call option that has been exercised, allowing for the
debt to be redeemed on February&nbsp;15, 2007.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada has a shelf prospectus providing for the issuance of $3.0&nbsp;billion of MTN debentures. As
of March&nbsp;7, 2007, Bell Canada had issued $200&nbsp;million of MTN debentures under its current shelf
prospectus. This shelf prospectus expires in June&nbsp;2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada may issue notes under its commercial paper program up to the amount of its supporting
committed lines of credit. The total amount of its supporting committed lines of credit available
was $872&nbsp;million at December&nbsp;31, 2006. Bell Canada had no commercial paper outstanding at December
31, 2006. Bell Canada can issue up to $400&nbsp;million Class&nbsp;E notes under its commercial paper
program. These notes are not supported by committed lines of credit and may be extended in certain
circumstances. Bell Canada had no Class&nbsp;E notes outstanding at December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain of Bell Canada&#146;s debt agreements impose covenants which place limitations on the issuance
of additional debt with a maturity date exceeding one year based on certain tests related to
interest and asset coverage. Bell Canada is in compliance with all conditions and restrictions
attaching to its debt securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">12 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Ratings for BCE Inc. and Bell Canada securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ratings generally address the ability of a company to repay principal and interest or dividends on
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s and Bell Canada&#146;s securities are rated by the following rating agencies:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Dominion Bond Rating Service Limited (DBRS)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Standard &#038; Poor&#146;s, a division of The McGraw-Hill Companies, Inc. (S&#038;P)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Moody&#146;s Investors Service, Inc. (Moody&#146;s)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fitch Ratings Ltd. (Fitch).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section describes the credit ratings that BCE Inc. and Bell Canada have asked for or received
for their securities. These ratings provide investors with an independent measure of credit
quality of an issue of securities. Each rating should be evaluated independently.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These credit ratings are not recommendations to purchase, hold or sell any of the securities
discussed above, or a comment on the market price or suitability for a particular investor. There
is no assurance that any rating will remain in effect for any given period of time or that any
rating will not be revised or withdrawn in the future by a rating agency.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Commercial paper</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below shows the range of credit ratings that each rating agency which rates BCE Inc.&#146;s
or Bell Canada&#146;s short term debt instruments assigns to short-term debt instruments.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGHEST QUALITY</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOWEST QUALITY</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SECURITIES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SECURITIES</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RATED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RATED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DBRS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">R-1 (high)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">D</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">A-1 (high)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">D</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Moody&#146;s</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">P-1</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">P-3</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The DBRS short-term debt rating scale indicates DBRS&#146; assessment of the risk that a borrower will
not fulfill its near-term debt obligation in a timely manner. Every DBRS rating is based on
quantitative and qualitative considerations relevant to the borrowing entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">An S&#038;P commercial paper rating indicates S&#038;P&#146;s assessment of whether the company can meet the
financial commitments of a specific commercial paper program or other short-term financial
instrument, compared to the debt servicing and repayment capacity of other companies in Canada&#146;s
financial markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Moody&#146;s short-term ratings indicate Moody&#146;s assessment of the ability of issuers to meet
short-term financial obligations. It may assign ratings to issuers, short-term programs or to
individual short-term debt instruments. These short-term obligations generally have an original
maturity of 13 months or less, unless explicitly noted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. and Bell Canada have received the following credit ratings for commercial paper.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">COMMERCIAL PAPER</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CREDIT RATING</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DBRS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">R-1 (low)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">A-1 (low)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Moody&#146;s</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">P-2</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DBRS has also assigned an R-l (low)&nbsp;rating to Bell Canada and an R-2 (high)&nbsp;rating to BCE
Inc. for extendible commercial notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The R-l (low)&nbsp;rating for short-term debt ranks third among the 10 credit ratings given by DBRS,
and according to DBRS, indicates:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>satisfactory credit quality</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>respectable overall strength and outlook for key liquidity, debt and profitability ratios,
but not as favourable as higher rating categories</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any qualifying negative factors that exist are considered manageable, and the company is
normally of sufficient size to have some influence in its industry.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The R-2 (high)&nbsp;rating for short-term debt ranks fourth among the 10 credit ratings given by DBRS,
and according to DBRS, indicates the upper end of adequate credit quality. The ability to repay
obligations as they mature remains acceptable, although the overall strength and outlook for key
liquidity, debt and profitability ratios is not as strong as higher rating categories.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The A-l (low)&nbsp;rating ranks third among the eight short-term credit ratings given by S&#038;P and,
according to S&#038;P, indicates the short-term obligation is slightly more susceptible to the adverse
effects of changes in circumstances and economic conditions than short-term obligations in higher
rating categories and a satisfactory capacity to meet financial commitments on short-term
obligations. Obligations rated A-l (low)&nbsp;on the Canadian commercial paper rating scale would
qualify for a rating of A-2 on S&#038;P&#146;s global short-term rating scale.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The P-2 rating provided for BCE Inc. and Bell Canada commercial paper ranks second among the three
short-term credit ratings given by Moody&#146;s and according to Moody&#146;s, indicates a strong ability to
repay short-term debt obligations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Long-term debt</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below shows the range of credit ratings that each rating agency assigns to long-term
debt instruments.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGHEST QUALITY</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOWEST QUALITY</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SECURITIES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SECURITIES</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RATED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RATED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DBRS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">AAA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">D</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">AAA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">D</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Moody&#146;s</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">Aaa</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">C</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fitch</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">AAA</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">D</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The DBRS long-term debt rating scale indicates the risk that a company may not meet its
obligations to pay interest and principal in a timely manner. Every DBRS rating is based on
quantitative and qualitative considerations relevant to the borrowing entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">S&#038;P&#146;s credit rating scale provides a current assessment of the creditworthiness of a company in
meeting a specific financial obligation, a specific class of financial obligations, or a specific
financial program. It takes into consideration:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the
obligation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the currency that the obligation is denominated in</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>current information provided by the company or obtained by S&#038;P from other reliable sources</TD>
</TR>

</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.
2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|&nbsp;&nbsp;13
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unaudited financial information from time to time, as S&#038;P does not perform an audit</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the likelihood of payment &#151; capacity and willingness of the company in meeting its
financial commitment on an obligation according to the terms of the obligation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nature of and provisions of the obligation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the protection afforded by, and relative position of, the obligation in the event of
bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws
affecting creditors&#146; rights.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Moody&#146;s long-term obligation ratings are an assessment of the relative credit risk of fixed-income
obligations with an original maturity of one year or more. They address the possibility that a
financial obligation will not be honoured as promised. Such ratings reflect both the likelihood of
default and any financial loss suffered in the event of default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fitch&#146;s international long-term credit ratings assess the capacity to meet foreign or local
currency commitments. Both foreign and local currency ratings are internationally comparable
assessments. The local currency rating measures the probability of payment only within the
sovereign state&#146;s currency and jurisdiction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. and Bell Canada have received the following credit ratings for long-term debt:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BCE INC.</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL CANADA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL CANADA</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">UNSUBORDINATED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">UNSUBORDINATED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">SUBORDINATED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LONG-TERM DEBT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LONG-TERM DEBT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LONG-TERM DEBT</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DBRS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">A (low)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">A</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">BBB (high)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">BBB&#043;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">A-</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">BBB&#043;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Moody&#146;s</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">Baa2</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">Baa1</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">Baa2</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fitch</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">BBB&#043;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">BBB&#043;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">BBB</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The DBRS A, A (low)&nbsp;and BBB (high)&nbsp;ratings on long-term debt rank sixth, seventh and eighth,
respectively, among the 26 long-term debt credit ratings given by DBRS.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">According to DBRS, a company with long-term debt rated A by DBRS:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>is satisfactory credit quality</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>protection of interest and principal is still substantial, but the degree of strength is
less than that of AA rated entities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While A is a respectable rating, companies that fall into this category are considered to be more
susceptible to adverse economic conditions and have greater cyclical tendencies than higher-rated
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">According to DBRS, long-term debt rated BBB by DBRS:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>is adequate credit quality</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>protection of interest and principal is acceptable, but the company is fairly susceptible
to adverse changes in financial and economic conditions, or there may be other adverse
conditions present which reduce the strength of the company and its rated securities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The A- and BBB&#043; ratings rank seventh and eighth, respectively, among the 22 long-term debt credit
ratings given by S&#038;P. According to S&#038;P, an obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the company still has a strong capacity to meet its financial
commitment on the obligation. According to S&#038;P, a company rated BBB has adequate capacity to meet
its financial commitments. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the company to meet its financial commitments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Baal and Baa2 ratings rank eighth and ninth, respectively, among the 21 long-term debt credit
ratings given by Moody&#146;s. According to Moody&#146;s, obligations rated Baa are subject to moderate
credit risk. They are considered medium-grade and may have certain speculative characteristics.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The BBB&#043; and BBB ratings rank eighth and ninth, respectively, among the 23 long-term ratings given
by Fitch. According to Fitch, BBB ratings indicate that there is currently expectations of low
credit risk and good credit quality. The capacity for payment of financial commitments is
considered adequate but adverse changes in circumstances and economic conditions are more likely to
impair this capacity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Preferred Shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below describes the range of credit ratings that each rating agency assigns to
preferred share instruments.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGHEST QUALITY</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOWEST QUALITY</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SECURITIES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SECURITIES</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RATED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RATED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DBRS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">Pfd-1 (high)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">D</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">P-1 (high)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">D</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The DBRS preferred share rating scale indicates their assessment of the risk that a borrower may
not be able to meet its full obligation to pay dividends and principal in a timely manner. Every
DBRS rating is based on quantitative and qualitative considerations relevant to the borrowing
entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">S&#038;P&#146;s
preferred share rating is a current assessment of the credit worthiness of a company in
meeting a specific preferred share obligation issued in the market, compared to preferred shares
issued by other issuers in the Canadian market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. has received the following credit ratings for the first preferred shares it has issued.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">PREFERRED SHARE</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CREDIT RATING</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DBRS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="right">Pfd-2 (low)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">P-2</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Pfd-2 (low)&nbsp;rating for preferred shares ranks sixth among the 16 preferred share credit
ratings given by DBRS. According to DBRS, a company with preferred shares rated Pfd-2 by DBRS:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>is satisfactory credit quality</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>protection of dividends and principal is still substantial, but earnings, balance sheet, and
coverage ratios are not as strong as Pfd-1 rated companies. Generally, companies with Pfd-2
ratings have senior bonds rated in the A category.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The P-2 rating ranks fifth among the 18 preferred share credit ratings given by S&#038;P. A P-2 rating
on the Canadian scale is equivalent to a BBB rating on the global scale. According to S&#038;P, an
obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions
or changing circumstances are more likely to weaken the company&#146;s ability to meet its financial
commitment on the obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">14 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Outlook</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. and Bell Canada have stable outlooks from DBRS, Moody&#146;s and Fitch and a negative outlook
from S&#038;P.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Trading of our securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The common and preferred shares of BCE Inc. are listed on the TSX and, up to January&nbsp;31, 2007, the
Bell Canada preferred shares were also listed on the TSX. In addition, BCE Inc.&#146;s common shares are
also listed on the New York Stock Exchange (NYSE)&nbsp;and the SWX Swiss Exchange. The tables below and
on the next pages show the range in share price per month and volume traded on the TSX in 2006 for
each class of BCE Inc. securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BCE Inc. common shares</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">31.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,311,684</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,343,412</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">34.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,465,748</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">31.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86,785,489</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,769,722</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,786,736</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46,138,711</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48,550,885</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,133,692</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,161,271</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,246,216</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">29.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,586,682</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD><B>BCE
Inc. preferred shares &#151; Series&nbsp;R</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,514,084</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,973</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,404</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">137,037</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,395</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,585</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,402</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,442</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,936</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102,660</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164,565</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">468,330</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD><B>BCE Inc. preferred shares &#151; Series&nbsp;S</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>


<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">472,130</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87,660</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61,520</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,910</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,875</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,212</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,857</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">142,599</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58,656</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">279,511</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,978</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD><B>BCE
Inc. preferred shares &#151; Series&nbsp;T</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">594,453</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,515</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD><B>BCE
Inc. preferred shares &#151; Series&nbsp;Y</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,526</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,175</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,446</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,045</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,997</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,668</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,060</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,585</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,594</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,447</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD><B>BCE
Inc. preferred shares &#151; Series&nbsp;Z</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">539,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">23.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">285,239</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,045</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78,399</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,681</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,178</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">307,021</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">317,400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138,910</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,615</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | 15
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BCE Inc. preferred shares &#151; Series&nbsp;AA</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,380,470</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87,793</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,591</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,232</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89,728</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78,289</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">675,784</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">140,256</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,789</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">294,413</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148,853</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">273,951</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD><B>BCE Inc. preferred shares &#151; Series&nbsp;AC</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,162,825</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89,946</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">134,733</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,705</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,660</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">115,246</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">546,080</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">246,945</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,680</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">520,236</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">205,760</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,356</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD colspan="13"><B>Bell
Canada preferred shares &#151; Series 15 (exchanged effective January 31, 2007 for BCE new
preferred shares &#151; Series&nbsp;AE)</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,205</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,112</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,925</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,920</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,801</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,998</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,411</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,327</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD colspan="13"><B>Bell
Canada preferred shares &#151; Series 16 (exchanged effective January 31, 2007 for BCE new preferred
shares &#151; Series&nbsp;AF)</B> </TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,885</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,609</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">184,308</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,179</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164,130</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,944</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">407,349</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73,449</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,797</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,076</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,789</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,692</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD colspan="13"><B>Bell
Canada preferred shares &#151; Series 17 (exchanged effective January 31, 2007 for BCE new preferred
shares &#151; Series&nbsp;AG)</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">241,300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,262</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53,751</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">160,699</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,885</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,054</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">650,400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,890</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">302,534</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84,220</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,465</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46,739</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 10pt">
    <TD colspan="13"><B>Bell
Canada preferred shares &#151; Series 18 (exchanged effective January 31, 2007 for BCE new preferred
shares &#151; Series&nbsp;AH)</B></TD>
</TR>
<TR valign="bottom" style="font-size: 10pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,900</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,130</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102,470</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">882,930</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">212,984</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,965</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">175,400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">171,925</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">16 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell
Canada preferred shares &#151; Series&nbsp;19 (exchanged effective January&nbsp;31, 2007 for BCE new preferred
shares &#151; Series&nbsp;AI)</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VOLUME</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">HIGH</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LOW</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TRADED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">525,828</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125,527</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">October</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99,832</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,033,049</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,374,749</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,847,355</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">306,157</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112,327</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,484</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">March</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">220,046</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">254,087</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,085</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Our dividend policy
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s dividend policy takes into consideration a number of factors including the corporation&#146;s
earnings and cash flow trends, financial condition and capital requirements. We seek to allow our
shareholders to participate in the company&#146;s operational progress through growth in dividend
distributions, while maintaining a healthy capital structure that provides sufficient financial
flexibility for investment in strategic priorities and future growth.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On that basis, on December&nbsp;12, 2006, BCE Inc. announced that its board of directors approved an
increase in BCE Inc.&#146;s common share dividend of 11% increasing the dividend from $1.32 to $1.46 per
common share on an annualized basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The board of directors of BCE Inc. has established a targeted common share dividend payout ratio of
70-75% of earnings. Going forward, increases in the common share dividend will be directly linked
to growth in the company&#146;s earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s board of directors reviews BCE Inc.&#146;s dividend policy from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to being declared by the board of directors, BCE Inc. pays quarterly dividends on
common shares at a rate of $1.46 per year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to being declared by the board of directors, BCE Inc. pays dividends on preferred
shares every quarter, except for dividends on Series&nbsp;S, Series&nbsp;Y, Series&nbsp;AE and Series&nbsp;AH
preferred shares, which BCE Inc. declares and pays monthly.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below shows the amount of cash dividends declared per share of each class of BCE Inc.
shares for 2004, 2005, and 2006.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.32</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&#150; Series&nbsp;R</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.135</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.441375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.5435</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&#150; Series&nbsp;S</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0.97808</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.7546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.66022</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&#150; Series&nbsp;T</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0.281375</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&#150; Series&nbsp;Y</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0.97212</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.79798</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.66267</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&#150; Series&nbsp;Z</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.3298</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.3298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.3298</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&#150; Series&nbsp;AA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.3625</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.3625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.3625</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&#150; Series&nbsp;AC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.385</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.385</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As previously discussed, effective January&nbsp;31,2007, the outstanding Bell Canada preferred shares
were exchanged for equivalent BCE new preferred shares. The table below shows the amount of cash
dividends declared in 2004, 2005 and 2006 per class of Bell Canada preferred shares.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD><SUP style="font-size: 85%; vertical-align: text-top">(<B>1</B>)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Series&nbsp;15 (exchanged for BCE Inc. Series&nbsp;AE)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.96979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.80885</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.375</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px">Series&nbsp;16 (exchanged for BCE Inc. Series&nbsp;AF)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px">Series&nbsp;17 (exchanged for BCE Inc. Series&nbsp;AG)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.143755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.31252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.31252</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px">Series&nbsp;18 (exchanged for BCE Inc. Series&nbsp;AH)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.88802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px">Series&nbsp;19 (exchanged for BCE Inc. Series&nbsp;AI)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.27501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.38752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.38752</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="margin-top: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Excludes $0.20 special dividend per share declared on December&nbsp;11, 2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Our policy on corporate responsibility
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;2, 2004, BCE Inc. adopted an environmental
policy that affirms:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our commitment to environmental protection</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our belief that environmental protection is an integral part of doing business, and needs to
be managed systematically under a continuous improvement process.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The policy contains principles that support our commitment, varying from exercising due diligence
to meet or exceed the environmental legislation that applies to us, to preventing pollution and
promoting cost-effective initiatives that minimize resources and waste.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have instructed subsidiaries subject to this policy to support these principles, and have
established a management-level committee to oversee the implementation of the policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada monitors its operations to ensure that it complies with environmental requirements and
standards, and takes action to prevent and correct problems, when needed. It has had an
environmental management and review system in place since 1993, that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provides early warning of potential problems</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>identifies management and cost-saving opportunities</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>establishes a course of action</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ensures ongoing improvement through regular monitoring and reporting.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | 17
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">One of its key tools is the corporate environmental action plan, which outlines the environmental
activities of Bell Canada&#146;s various business units. The plan identifies funding requirements,
accountabilities and deliverables, and monitors Bell Canada&#146;s progress in meeting its objectives.
As of December&nbsp;31, 2006, Bell Canada has integrated the following entities into its corporate
environmental action plan: Bell Canada, Bell Aliant (Qu&#233;bec and Ontario), Bell Mobility, Bell
ExpressVu, Bell West, Bell Technical Solutions Inc. (Bell Technical Solutions), BCE Nexxia Corp.,
Expertech, T&#233;l&#233;bec, NorthernTel, Northwestel and Telesat.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For the year ended December&nbsp;31, 2006, Bell Canada spent $12.5&nbsp;million on environmental activities,
64% of this was expenses and 36% was for capital expenditures. For 2007, Bell Canada has budgeted
$13.4&nbsp;million (74% for expenses and 26% for capital expenditures) to ensure that its environmental
policy is applied properly and its environmental risks are minimized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2002 Bell Aliant adopted a comprehensive environment policy for Atlantic Canada updated in 2006
which affirms its commitment to working to create a sustainable future by integrating long-term
economic, environmental and social considerations into the way the business is operated. The policy
provides for the identification of activities and situations which may have potential to harm the
environment, and the implementation of environmentally positive practices and preventive measures.
Bell Aliant&#146;s program seeks to ensure that it complies with all environmental regulatory
requirements and that its activities are carried out in a manner that minimizes risk to the
environment through a continuous improvement process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Aliant manages its environment program through processes similar to those employed by Bell
Canada, and collaborates on many levels to seek harmonization with Bell Canada&#146;s environment
program. Bell Aliant has adopted an environment action plan which
sets out specific environmental
goals for 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are committed to sustainable development and integrate environmental, social and economic
considerations into our business decisions. We engage with stakeholders to identify opportunities
to create benefits for both society and the company while minimizing where we can, any negative
impact our activities may generate. In line with this commitment, in 2006, BCE Inc. adopted a
resolution to support the United Nations Global Compact principles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are an active member of the Global e-Sustainability Initiative (GeSI) (www.gesi.org), an
international organization that promotes sustainable development in the ICT industry. Partners of
the GeSI acknowledge the need for the ICT industry to take a leadership role in:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>better understanding the impact and opportunities offered by its evolving technology in a
fast growing information society; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings">&#167;</font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>providing individuals, businesses and institutions with sustainable solutions to the
challenges they face in attempting to maintain a balance between economy, ecology and society.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. is a component of socially responsible investment indices such as the Dow Jones
Sustainability Index, the FTSE4 GOOD Index and the Jantzi Social Index.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our duty as a responsible corporate citizen also extends to using our financial resources and the
expertise of our employees to invest in the communities we serve.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe the future of our country is being determined today by our collective ability to enable
our children to reach their full potential.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">That is why our investment is focused on organizations that help children and youth grow up strong
and healthy. We therefore invest, for example, in innovative programs in children&#146;s hospitals and
we support initiatives such as cybertip.ca &#151; a web portal through which ordinary Canadians can
report suspected abuse. We also continue to grow the Bell Walk for Kids Help Phone which has raised
$9&nbsp;million in five years for Canada&#146;s only toll-free, 24-hour bilingual phone and web counselling,
referral and information service for young people.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, we contributed over $20&nbsp;million in donations and local community sponsorships. In
addition, our employees and pensioners committed over $1.6&nbsp;million in charitable gifts and logged
more than 300,000 hours in volunteer time. All of this is indicative of our belief that we have an
important role to play in the sustainability of the communities in which we live and work.
</DIV>
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Business highlights
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section describes significant events in the past three years that have influenced our
business.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">2006 highlights
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Key acquisitions and dispositions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell Aliant</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On July&nbsp;7, 2006, BCE Inc. and Aliant formed Bell Aliant. Bell Aliant combines Bell Canada&#146;s former
regional wireline operations in rural Ontario and Qu&#233;bec with Aliant&#146;s former wireline, information
technology and related operations in Atlantic Canada, and also includes Bell Canada&#146;s former 63.4%
interest in NorthernTel and T&#233;l&#233;bec held indirectly through Bell Nordiq Group Inc. As part of the
transaction, we acquired Aliant&#146;s wireless assets and the shares of Aliant&#146;s subsidiary, DownEast
Ltd., which operates retail outlets throughout Atlantic Canada. Upon closing of the transaction, we
held a 73.5% indirect interest in Bell Aliant, which we subsequently reduced to approximately 45%
through a distribution of trust units by way of a return of capital to holders of BCE Inc. common
shares on July&nbsp;10,2006. In conjunction with this distribution, BCE Inc. reduced its outstanding
common shares by 75.8&nbsp;million. Bell Aliant began trading on the TSX on July&nbsp;10, 2006 under the
symbol &#145;BA.UN&#146;. The financial results of Bell Aliant continue to be consolidated by BCE Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For so long as we own a 30% or greater interest in Bell Aliant and provided that certain major
commercial agreements are in place, we have the right to appoint a majority of the directors and to
nominate a majority of the trustees of Bell Aliant. We also have the ability to veto certain
actions of Bell Aliant (business plans, significant corporate transactions, material changes in
business, leverage in excess of 2.5 times debt to EBITDA, appointment and change of Chief Executive
Officer and entering into material commercial agreements with competitors of BCE) as long as we own
a 20% or greater interest in Bell Aliant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">18 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the fourth quarter of 2006, Bell Aliant announced a proposal to acquire all of the units of Bell
Nordiq Income Fund (Bell Nordiq), the holder of the remaining 36.6% interest in NorthernTel and
T&#233;l&#233;bec. The transaction, including the payment by Bell Nordiq to Bell Nordiq unitholders of a
special distribution of $4.00 per unit, or $131&nbsp;million and the issuance of 0.4113 of a Bell Aliant
unit in exchange for each Bell Nordiq unit for a total of 13.5&nbsp;million units, was completed at the
end of January&nbsp;2007. Bell Nordiq units ceased trading on the TSX as of the close of business on
January&nbsp;29, 2007 and were delisted at the close of business on
January&nbsp;30, 2007. We currently own an
approximate 42% interest in Bell Aliant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Completion of Bell Globemedia reorganization</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;30, 2006, following the receipt of regulatory approval, BCE Inc. completed the sale of
20% of Bell Globemedia to Ontario Teachers Pension Plan, the sale of an additional 20% to Torstar
Corporation and finally the sale of 8.5% to The Woodbridge Company Limited decreasing BCE Inc.&#146;s
holding in Bell Globemedia from 68.5% to 20%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of the transaction, we retained certain important rights and have entered into a commercial
agreement with Bell Globemedia to have access to existing and future content. Subsequent to the
conclusion of this transaction, Bell Globemedia completed its takeover bid of CHUM Limited,
resulting in a further reduction of BCE Inc.&#146;s ownership in Bell Globemedia from 20% to
approximately 15%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Effective on January&nbsp;1, 2007, Bell Globemedia changed its name to CTVglobemedia Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Investment in Clearwire Corporation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
September&nbsp;6, 2006, Bell Canada exercised its pre-emptive right to subscribe for US$83.8&nbsp;million
of additional common equity of Clearwire Corporation (Clearwire), bringing its total invested
capital in Clearwire to US$183.8&nbsp;million. This investment was made as part of a US$1.1&nbsp;billion
financing round completed by Clearwire.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Clearwire has filed a registration statement in connection with an initial public offering which
was declared effective by the U.S. Securities and Exchange Commission on March&nbsp;7, 2007. The closing
of this offering and the issuance of the shares (assuming the over-allotment option is not
exercised) is expected to dilute our equity interest to approximately 8%. The shares of Clearwire
are now listed on the NASDAQ Global Select Market under the symbol &#147;CLWR&#148;. See <I>Business highlights
&#151; 2005 highlights </I>for more information about Clearwire.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Sale of Telesat</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Consistent with its strategy of concentrating on its core communications business, on December&nbsp;18,
2006, BCE Inc. announced the sale of its satellite services subsidiary Telesat to a new acquisition
company formed by PSP Investments and Loral Space &#038; Communications Inc. for $3.25&nbsp;billion. Existing
capital losses will be utilized to complete the transaction without any cash taxes being triggered.
The sale is subject to regulatory approval both in Canada and the United States, and is expected to
close in mid-2007. Other customary closing conditions
must also be satisfied. A material adverse change in Telesat&#146;s results and operations prior to
closing or the failure of the purchaser to complete its committed financing or to fulfill its
obligations to BCE Inc. could prevent the sale from occurring, or may result in the sale occurring
on materially different terms and conditions. In conjunction with the sale, we have put in place a
set of commercial arrangements between Telesat and Bell ExpressVu that guarantee Bell ExpressVu
access to current and expanded satellite capacity, including services available after the launch of
Telesat&#146;s Nimiq 5 satellite in 2009. We will not account for Telesat as discontinued operations
because of the ongoing commercial relationships between BCE and Telesat that will continue after
the sale is completed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Exchange of interests in Mobile Satellite Ventures, L.P. and TerreStar Networks Inc. for shares
of SkyTerra Communications, Inc. and Motient Corporation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
January&nbsp;5, 2007, we exchanged approximately 8&nbsp;million units of privately-held Mobile Satellite
Ventures, L.P. (MSV)&nbsp;for approximately 22.5&nbsp;million non-voting common shares of publicly-traded
SkyTerra Communications, Inc. (SkyTerra) (over-the-counter under the symbol &#147;SKYT&#148;). Those
non-voting common shares are convertible into common shares of SkyTerra upon their transfer by us
on the public market and represent an equity interest of approximately 21.2% in SkyTerra. 33% of
our SkyTerra shares are subject to certain transfer restrictions, which percentage will be reduced
to 25% on October&nbsp;6, 2007, 20% on October&nbsp;6, 2008 and zero on April&nbsp;6, 2010.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;15, 2007, we executed an agreement to exchange approximately 5.1&nbsp;million shares of
privately-held TerreStar Networks, Inc. (TerreStar) for approximately 9&nbsp;million common shares of
publicly-traded Motient Corporation (Motient) (over-the-counter under the symbol &#147;MNCP&#148;). Closing
of the exchange will occur on March&nbsp;8, 2007. On March&nbsp;7, 2007, we executed an agreement to dispose of
4.5&nbsp;million Motient shares which is also expected to close on March&nbsp;8, 2007. Our remaining Motient
shares, which will not be subject to any transfer restrictions for transfers on the public market,
will represent an equity interest of approximately 5.6% in Motient.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These exchange transactions were intended to unlock the value of our MSV and TerreStar investments.
BCE may consider disposing or acquiring from time to time shares of SkyTerra or Motient depending
on prevailing market conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Strategic announcements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Normal course issuer bid</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As at December&nbsp;31, 2006, BCE Inc. had purchased 45,150,000 common shares under its Normal Course
Issuer Bid commenced on February&nbsp;3, 2006 (2006 NCIB) and ended on February&nbsp;1, 2007, representing
approximately 100% of the total common shares targeted for repurchase, for a total cash outlay of
$1.241&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;12, 2006, BCE Inc. announced that it would initiate a new normal course issuer bid upon
the expiry of the 2006 NCIB. Further to this announcement, BCE Inc. received acceptance from the
TSX of its notice of intention to make a Normal Course Issuer Bid on February&nbsp;6, 2007. The filing
of this notice allows BCE Inc. to purchase
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | 19
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">for cancellation up to 40,000,000 of its common shares, representing approximately five per
cent of BCE Inc.&#146;s 807,658,658 common shares outstanding as at January&nbsp;31, 2007. BCE Inc. is
currently contemplating a buyback program of approximately $1.2&nbsp;billion. Purchase of the shares
will be carried out through the TSX and/or the NYSE and will be made in accordance with the by-laws
and rules of such exchanges. Purchases of common shares may be made from time to time, at market
prices, during the period starting February&nbsp;9, 2007 and ending no later than February&nbsp;8, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Simplification of corporate structure and approval of Bell Canada&#146;s plan of
arrangement for exchange of Bell Canada <BR>preferred shares</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;12, 2006, BCE Inc. announced that it would not move forward with the proposed
conversion of Bell Canada into an income trust nor with plans to make a tender offer for all of the
outstanding preferred shares of BCE Inc. and Bell Canada, but that it would continue with its
previously announced plans to simplify its corporate structure. As part of this process, BCE Inc.
intends, at its next annual shareholder meeting on June&nbsp;6, 2007, to submit a proposal to its
shareholders to change its name to Bell Canada Inc. and, if approved, Bell Canada intends to change
its name to Bell Inc. at the same time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, under a plan of arrangement, and as part of the corporate simplification process,
holders of Bell Canada preferred shares agreed at a special meeting held on January&nbsp;23, 2007 to
exchange their shares for BCE new preferred shares with the same series rights effective January
31, 2007. The arrangement provided for the payment of a one-time special dividend of $0.20 per Bell
Canada preferred share outstanding immediately prior to the exchange. The BCE new preferred shares
began trading on the TSX on February&nbsp;1, 2007. On the same day, BCE Inc. entered into agreements to
guarantee all of Bell Canada&#146;s public debt securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a result of the implementation of this plan of arrangement and guarantee, effective February&nbsp;1,
2007, Bell Canada no longer has to prepare and file public disclosure documents separate from those
of BCE Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Other developments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Labour settlement</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;15, 2006, we reached an agreement with the CEP on pay equity that benefits 4,765
current and former Bell Canada employees. The settlement covers Bell Canada employees represented
by the CEP in positions occupied primarily by women. The settlement was for approximately $100
million.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">2005 highlights
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following events influenced our business in 2005 or were referred to
in our 2005 AIF:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On April&nbsp;7, 2005, Bell Canada completed the acquisition of Nexxlink Technologies Inc., a
provider of integrated IT solutions, for a purchase price of $74&nbsp;million in cash (since
integrated within Bell Business Solutions Inc.).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On April&nbsp;30, 2005, Bell Canada completed the purchase of all the&nbsp;shares of Entourage Technology Solutions Inc. (Entourage) that it did
not already own. Entourage (since renamed Bell Technical Solutions) is
Bell Canada&#146;s residential installation and repair supplier.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On March&nbsp;8, 2005, Bell Canada announced an alliance with Clearwire, a
privately-held company led by Mr.&nbsp;Craig O. McCaw, through which Bell
Canada became Clearwire&#146;s exclusive strategic partner for Voice over
Internet Protocol (VoIP) and certain other value-added Internet
Protocol (IP)&nbsp;services and applications in the United States. Bell
Canada will also become Clearwire&#146;s preferred provider of these
services and applications in markets beyond North America. Clearwire
offers advanced IP-based wireless broadband communications services in
the U.S. and other international markets. Its core offering is a non
line-of-sight (NLOS)&nbsp;wireless broadband data service that allows
customers &#147;nomadic&#148; Internet access. &#147;Nomadic&#148; refers to the ability
to access the Internet from any place within the service area that has
a power supply. Bell Canada manages the deployment and operation of Clearwire&#146;s U.S. VoIP
offering. At the same time, Bell Canada completed an investment of US$100&nbsp;million in Clearwire and
the CEO of BCE Inc. joined Clearwire&#146;s board of directors. Concurrently with this transaction,
Bell Canada acquired from companies directly or indirectly controlled by Mr.&nbsp;McCaw a 50% interest
in NR Communications Ltd., which is one of the two partners in the Inukshuk joint venture (as
discussed below).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On August&nbsp;2, 2005, Bell Canada announced the purchase of the
residential assets of Cable VDN Inc. (Cable VDN), a Montr&#233;al-based
cable company selling residential analog and digital TV and high-speed
Internet services for $26&nbsp;million.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On September&nbsp;16, 2005, Bell Canada announced an alliance with Rogers
Communications Inc. (Rogers) to jointly build and manage a nationwide
wireless broadband network through Inukshuk Wireless Inc. (Inukshuk),
which holds approximately 98 MHz of wireless broadband spectrum in the
2.5G Hz frequency range across much of Canada. Inukshuk is owned and
controlled equally by Bell Canada and Rogers who jointly and equally
fund the initial network deployment costs estimated at $200&nbsp;million
over a three-year period. The development and commercialization of
services, as well as sales, marketing and end-user customer care and
billing functions is provided directly by Bell Canada and Rogers to
their respective customers. Separately, in conjunction with this
transaction, Bell Canada reached an agreement with companies
controlled directly or indirectly by Mr.&nbsp;McCaw to acquire the
remaining 50% of NR Communications Ltd. not already owned by Bell
Canada.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On December&nbsp;16, 2005, BCE Inc. announced its decision to sell its
29.8% interest in CGI Group Inc. (CGI). On January&nbsp;12, 2006, CGI&nbsp;purchased 100&nbsp;million of its Class&nbsp;A shares held by BCE Inc. at a price
of $8.5923 per share for total proceeds to BCE Inc. of $859.23&nbsp;million. The shareholders&#146; agreement between BCE Inc. and CGI was
terminated upon completion of the transaction. At the same time we
extended our outsourcing agreements with CGI. CGI remains Bell
Canada&#146;s preferred IS/IT (information systems/information
technologies) provider until June&nbsp;2016. CGI&#146;s outsourcing of its
Canadian communications network management requirements to Bell Canada
was similarly extended. The commercial alliance between CGI and Bell
Canada&#146;s Enterprise group was also extended to 2016. The Bell Canada
pension fund acquired 25&nbsp;million Class&nbsp;A shares of CGI still held by
BCE Inc.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">20 |&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">on July&nbsp;28, 2006 and BCE Inc.&#146;s last remaining 6.4&nbsp;million Class&nbsp;A shares on October&nbsp;23,
2006.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">2004 highlights
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
following events influenced our business in 2004 or were referred to
in our 2004 AIF.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On February&nbsp;10, 2004, Bell Canada exchanged its 3.24% remaining indirect interest in YPG
LP and YPG General Partner Inc. (Yellow Pages Group) for units of the Yellow Pages Income
Fund. On July&nbsp;21, 2004, Bell Canada sold its remaining interest in the Yellow Pages Income
Fund for net cash proceeds of $123&nbsp;million.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On March&nbsp;30, 2004, Bell Canada and The Virgin Group announced plans to launch mobile voice
and data services in Canada through a jointly-owned entity, Virgin Mobile Canada. Virgin
Mobile Canada launched its services through a national rollout using our 1X digital wireless
network on March&nbsp;1, 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On May&nbsp;20, 2004, Bell Canada filed a lawsuit against Manitoba Telecom Services Inc. (MTS)
after MTS announced it would purchase Allstream Inc. Bell Canada sought damages and an
injunction that would prevent MTS from breaching the terms and conditions of the commercial
agreements it had with Bell Canada. On June&nbsp;3, 2004, Bell Canada also filed a lawsuit against
Allstream Inc. seeking damages related to the same announcement. On June&nbsp;30, 2004, BCE Inc.
reached an agreement with MTS to settle the lawsuits. The terms of the settlement included: a
payment of $75&nbsp;million by MTS to Bell Canada received on August&nbsp;3, 2004 for unwinding various
commercial agreements; the removal of contractual competitive restrictions
to allow Bell Canada and MTS to compete freely with each other, effective June&nbsp;30, 2004; the
orderly disposition of our interest in MTS (our voting rights in MTS were waived after receiving
the $75&nbsp;million payment); and a premium payment to us by MTS, if there had been a change of
control of MTS before January&nbsp;1, 2006 and if there had been an appreciation in MTS&#146; share price
from the time of our divestiture to the time of any takeover transaction. On August&nbsp;1, 2004, the
MTS shares held by Bell Canada were transferred to BCE Inc. In late September&nbsp;2004, BCE Inc.
disposed of its 15.96% interest in MTS. Total net cash proceeds from this transaction were $584
million.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On May&nbsp;21, 2004, Bell Canada acquired 100% of the outstanding shares of Infostream
Technologies Inc., a systems and storage technology firm.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On May&nbsp;26, 2004, Bell Canada announced an agreement to purchase the Canadian operations of
Vancouver-based 360networks Corporation (360networks), a telecommunications service provider,
for $293&nbsp;million (including acquisition costs) in cash. The transaction was completed on
November&nbsp;19, 2004. The purchase included the shares of 360networks&#146; subsidiary, Group Telecom,
and certain related interconnected U.S. network assets. Following the purchase, Bell Canada
sold the retail customer operations in Central and Eastern Canada to Call-Net Enterprises Inc.
(Call-Net). For a share of the revenues, Bell Canada now provides network facilities and other
operations and support services to Call-Net so Call-Net can service its new customer base.
This transaction gave Bell Canada an extensive fibre network that includes leading-edge local
facilities in Vancouver, Victoria, Calgary,
Edmonton and other cities in Western Canada. Bell Canada also gained access to almost 200
office buildings in Western Canada.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In June&nbsp;2004, Bell Canada acquired Emergis Inc.&#146;s (formerly
BCE Emergis Inc.) (Emergis) security business. This business provides organizations with the
security infrastructure for their electronic service delivery needs to help ensure data is secure
and viewed only by the appropriate individuals.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In June&nbsp;2004, Bell Canada announced an employee departure program that
consisted of two phases. The first phase was an early retirement plan
and the second phase was a departure plan. Under the early retirement
plan, eligible employees chose to receive a package that included a
cash severance, immediate pension benefits, an additional guaranteed
pension payable up to 65&nbsp;years of age, career transition services and
post-employment benefits. Under the early departure plan, employees
chose to receive a special cash allowance. Of the 7,000 eligible
employees, 3,950 decided to take advantage of the early retirement
plan and another 1,050 employees decided to take advantage of the
early departure plan. A total of approximately 5,000 employees left
the company, which represented approximately 11% of Bell Canada&#146;s
total employee base (excluding Bell Aliant). Almost all of the
employees who chose to take advantage of the program left Bell Canada
in 2004. The rest left during 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On June&nbsp;9, 2004, Bell Canada launched Sympatico.MSN.ca in partnership
with Microsoft Corporation (Microsoft). Sympatico. MSN.ca is a single
portal combining the best features and Internet tools of MSN Canada
Co. with the broadband content and innovative services of
Sympatico.ca. At the same time, Bell Canada introduced <I>Sympatico&#153; </I>with
MSN Premium, a custom-built version of the software featuring tools
that enable a safer online experience, including pop-up ad blocking,
spam filtering and parental controls.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On June&nbsp;16, 2004, BCE Inc. completed the sale of its 63.9% interest in
Emergis for net cash proceeds of $315&nbsp;million.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On August&nbsp;3, 2004, Bell Canada assumed 100% ownership of Bell West
Inc. by purchasing the 40% interest held by MTS for $646&nbsp;million.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On August&nbsp;16, 2004, Bell Canada reached a new four-year agreement with
approximately 7,100 technicians represented by the CEP. This agreement
will expire in November&nbsp;2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On September&nbsp;16, 2004, Bell Aliant&#146;s predecessor company, Aliant
Telecom Inc. (Aliant Telecom), reached a new agreement with its
approximately 4,300 unionized employees, represented by the Council of
Atlantic Telecommunication Unions. This agreement will expire in
December&nbsp;2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In October&nbsp;2004, Bell Aliant offered a voluntary Early Retirement
Incentive Program (ERIP)&nbsp;to eligible employees, which was accepted by
693 employees, including 654 employees or 11% of the workforce of
Aliant Telecom. Approximately 400 of the ERIP participants retired
effective January&nbsp;1, 2005, and the remainder left during 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On October&nbsp;18, 2004, Bell Canada was selected by the Vancouver
Organizing Committee as its Premier National Partner for the 2010
Olympic and Paralympic Winter Games. The partnership continues through
to 2012, securing the Canadian Olympic Team sponsorship rights to
Torino in 2006, Beijing in 2008, Vancouver in 2010, London in 2012 and
for two Pan-American Games. It provides Bell Canada with the
opportunity to build its brand by associating with one of the world&#146;s
strongest and most recognized brands.</TD>
</TR>

</TABLE>
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">About our <B>Businesses</B>
</DIV>

<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Our strategic priorities

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We accelerated the transformation of the company in 2006, further strengthening the
operational foundations we have put in place over the last three years. These included driving a
shift in our revenue mix towards growth services, resetting our cost base and returning to our core
communications business. We also continued to build upon all three strategic pillars &#151; improving
the customer experience, enhancing bandwidth and developing next-generation services. Marketing
fundamentals came into sharper focus, which enabled us to step up to the competitive challenges of
cable telephony more effectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The three pillars will continue to be critical in 2007, as will our efforts to improve our
operational efficiency and productivity. We will also place a growing focus on enhancing the
experience of our customers. It is how we will differentiate our business from the competition to
build customer loyalty as we drive the profitable expansion of our growth services and slow the
decline of our traditional voice and data businesses. However, service alone will not make us
competitive. We must also continue to deliver products, services and solutions that make a
difference for customers. We will continue to invest in developing growth services and enhancing
the networks on which they run. In 2007, the majority of our capital spending will be in areas such
as enhancing customer service, wireless operations and our advanced residential broadband network.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have established five operational priorities for 2007 to achieve our objective of delivering
consistent, reliable, high-quality communications services to customers efficiently and
cost-effectively:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1.&nbsp;<b>Service quality &#151; </B>We are determined to consistently meet or exceed customer expectations and
enhance their overall experience with Bell Canada. This focus on improving the total customer
experience will help to differentiate us from our competitors and ensure long-term customer loyalty
to the Bell brand and products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2.&nbsp;<b>Broadband acceleration &#151; </B>We will continue to invest in advanced network enhancements, such as
the continued rollout of fibre-to-the-node (FTTN)&nbsp;technology, in order to expand the reach and
speed of our digital subscriber line (DSL)&nbsp;Internet service and to enable video over Internet
Protocol (IPTV)&nbsp;services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3.&nbsp;<b>Wireless growth &#151; </B>A key driver of growth and financial performance, the wireless business will
be supported by an expanded array of handsets and devices, new products and features, expected
growth in data usage, ongoing enhancements to the broadband Evolution, Data Optimized (EVDO)
wireless data network and overall network quality. We are focused on delivering continued
improvements in average revenue per user (ARPU)&nbsp;and data growth, while acquiring our competitive
share of net subscriber additions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4.&nbsp;<b>Business sector profitability &#151; </B>With a focus on ICT/virtual chief information officer (VCIO)
profitability, we will leverage the unique capabilities and scale in our Enterprise and SMB
operations to take advantage of market opportunities and pull through connectivity revenues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5.&nbsp;<b>Productivity improvements &#151; </B>A core element of financial performance, productivity improvements
have enabled Bell Canada&#146;s increased competitiveness in the marketplace. Cost discipline remains a
centrepiece of our strategy, with productivity improvements expected to contribute to further
improvement in earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We intend
to execute these priorities based on a foundation of market leadership behaviour and a
balance between profitable growth and enhanced market share. With an increasingly cost-efficient
structure, we believe that we are well positioned to leverage our network capabilities as well as
our product and brand assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, we made significant progress in building upon each of our three key strategic pillars.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Enhancing customer experience by providing superior products and service that build loyalty</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our multi-product household strategy continued to drive increased penetration of households
subscribing to three or more products
(a&nbsp;combination of local wireline, Internet, video, wireless and long distance services), reaching
over 25% of total households in our Ontario and Qu&#233;bec footprint at the end of 2006, up from 22%
at the end of 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At the end of 2006, approximately six million customers were enjoying the benefits of a
single bill for their wireline, Internet, video and/or wireless services (our One Bill
program), compared with approximately two million at the end of 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As a result of our DSL hardening program, which has improved the performance of the network
through software upgrades and the installation of new hardware, we reduced major outages of
our high-speed Internet service by 12% in 2006 compared with the previous year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We delivered improved service commitments and service levels in 2006 by reducing the total
number of missed appointments for fixed wireline installations and repairs by approximately 3%
and 15%, respectively, over the previous year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our first call resolution rate in the Residential segment improved 2.1&nbsp;percentage points
in 2006 to approximately 81%.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Sympatico, our Internet service provider (ISP)&nbsp;to residential and SMB customers, launched new
desktop tools enabling customers to diagnose and correct configuration settings on their own
or remotely through a call centre agent. These new tools are intended to drive self-service
and reduce the average handling time of calls in our contact centres.
</td>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As at the end of
2006, 93% of our Enterprise customers had adopted our online bill manager tool, a service that
provides self-serve capabilities for business customers, enabling them to view, track and pay
invoices online and to produce customized reports.</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Enterprise unit began the implementation of Service Desk, which will integrate
connectivity and ICT customer care to create a single point of contact for the customer.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">22 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, we intend to continue improving service and enhancing the customer experience.
In particular, we plan to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>drive service quality so that it sets us apart in the market</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>deliver improved service commitments and service levels by significantly reducing the number
of missed appointments</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>achieve distribution excellence by expanding our points of presence, refreshing existing
stores, and enhancing existing channels such as <br>310-Bell and bell.ca</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expand our handset and device portfolios</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>improve processes to simplify customer transactions.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Deliver abundant and reliable bandwidth to enable next generation services</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We carried on with our rollout of FTTN by deploying another
1,564 neighbourhood nodes in 2006, raising the total number of nodes deployed to 3,612. In total,
we currently expect to deploy approximately 11,000 to 12,000 nodes by 2011 for a total cost of
approximately $1.2&nbsp;billion, of which approximately $400&nbsp;million has been spent as of the end of
2006.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We continued to invest in our high-speed EVDO wireless data network by expanding the
footprint to a number of cities and towns in Ontario, Qu&#233;bec, British Columbia and Alberta,
bringing coverage to 55% of the Canadian population.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We launched Sympatico Optimax&#153;, a high-speed Internet service that leverages the latest fibre
optic technology, across significant parts of Toronto and Montr&#233;al. The service offers an
Internet connection that delivers consistently fast Internet service, with speeds of up to
16&nbsp;megabits per second (Mbps).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inukshuk, our joint venture between Bell Canada and Rogers, completed the initial phase of
its new wireless broadband network that reaches five million households representing 40% of
the population
in 20 urban centres across Canada. This next-generation IP wireless network enables portable
services allowing subscribers to access the Internet and other applications such as VoIP and
video streaming.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, we intend to continue to expand the reach and speed of DSL service through our FTTN
rollout, which will enable speeds of up to 26&nbsp;Mbps. In the future, as consumer demand for
bandwidth-intensive applications increases, we believe that FTTN bandwidth speeds can be increased
to more than 40 Mbps through techniques such as shortening very high data rate DSL (VDSL)&nbsp;loop
lengths and bonding twisted-pair copper telephone lines. At the same time, the Inukshuk fixed
wireless broadband access network footprint will continue to be expanded. We also plan to complete
implementation of the EVDO wireless data network across our remaining wireless coverage areas.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Create next-generation services to drive ongoing profitable growth</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Bell Mobility launched a number of new services designed to drive data growth, including:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Groove Client, a music download service</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a music video ringtones service that allows customers to listen to and/or watch digital
music videos directly on their wireless phone</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>various video clip services featuring exclusive NHL hockey game highlights, MTV video
highlights and images, and news and business reports from CTV News and Report on Business
Television (ROBTv).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Bell ExpressVu continued to build on its expansive retail offering of leading high-definition
(HD)&nbsp;services with the launch of 12 new HD channels during the year. HD television, with its
high-resolution images and theatre-quality sound, provides a viewing experience that is richer
and more visually captivating than standard television. In addition, our video unit enhanced
its line-up of interactive TV (iTV) programming, providing the best interactive and on-demand
news, weather and sports experience.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Sympatico, our ISP to residential and SMB customers, started marketing several new products
and services in 2006, including:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an enhanced version of its MSN Music Store, which offers customers safe and secure
pay-per-download of high-quality music tracks via credit card payment</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#145;Personal Vault&#146;, a comprehensive online storage solution that is available exclusively
from Bell Canada to back-up, access and share content such as digital photos, financial
records, music and video files</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Canada&#146;s first subscription-based fraud protection service</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Sympatico&#153; Unplugged, </I>a high-speed portable Internet access product that offers speeds
comparable to current residential and SMB offerings.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Enterprise unit expanded its service offering in 2006 with applications such as IP audio
conferencing and an enhanced IP virtual private network (VPN)&nbsp;product with global capabilities
and advanced customer reporting functionality.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our SMB unit introduced several new products this year, including:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Business Internet Unplugged, </I>a portable wireless DSL service</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Managed IP, an IP Private Branch Exchange (IP PBX) monitoring, management and maintenance
service.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, our objective is to drive the introduction of new products and services that balance
innovation with profitability and that are brought to market more quickly. We plan to introduce
EVDO-enabled data applications and other services to our wireless customers in order to deliver
continued improvements in ARPU and data growth, as well as expand our residential broadband
services to help customers manage information needs in their homes by leveraging our Sympatico-MSN
portal. In our video unit, we intend to drive growth by investing in new growth areas, such as IPTV
and HD programming, in our goal of becoming the leader in &#147;on-demand&#148; television. In the Business
segment, our Enterprise unit will continue its efforts to expand its ICT solutions by focusing on
network-supported applications and services in the financial services and federal, provincial and
large municipal government sectors, as well as by concentrating on key customers in the retail,
distribution and manufacturing sectors. We will also strengthen our capabilities in data and
network security and business resilience. The overall objective within our SMB unit is to drive
greater profitability through stronger organic growth with its refined VCIO strategy and the
expansion of existing value-added services (VAS)&nbsp;that build on the strengths of recent business
acquisitions, as well as sale force and mid-market customer realignment.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 23
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Transforming our cost structure</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Overall, our various cost-reduction initiatives resulted in savings of $724&nbsp;million in 2006,
which brought the total amount of cost savings since 2004 to approximately $1.6&nbsp;billion. Cost
savings this year were realized primarily through process improvements in our business units and
our supply chain transformation program, which contributed to maintaining Bell Canada&#146;s EBITDA
margin stable year-over-year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cost reductions from efficiency-related process improvements amounted to $341&nbsp;million in 2006 and
were driven primarily by:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a reduction in the number of invoices printed and mailed to our residential customers
under the One Bill initiative</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>more efficient contact centre operations, resulting in lower call volumes</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a reduction in the number of missed commitments for fixed wireline installations and repairs</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>workforce reductions stemming from greater use of outsourcing and other productivity
initiatives.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With respect to our workforce reduction program for 2006, our original plan called for 3,000 to
4,000 employee departures. In total, over 3,300&nbsp;employee departures took place. However, this was
offset by approximately 550 positions which were added in the year in support of our revenue growth
and service quality initiatives. As a result, net employee departures totalled approximately 2,750 in the year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Supply transformation savings of $383&nbsp;million in 2006 were realized from:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increased controls over discretionary spending</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reduced spending on IT services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>outsourcing of selected contact centre call volumes</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>renegotiated contracts resulting in rate reductions and vendor rebates for wireless handsets,
wireline data and voice equipment, and Internet portal services that we resell to our
customers.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Bell Canada
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada is Canada&#146;s leading provider of wireline and wireless communications services,
Internet access, data services and video services to residential and business customers. Bell
Canada&#146;s major lines of business, which, at December&nbsp;31, 2006, were included in Bell Canada&#146;s
<I>Residential, Business, Bell Aliant </I>and <I>Other Bell Canada </I>segments, are described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some of Bell Canada&#146;s revenues vary slightly by season. Business segment revenues tend to be higher
in the fourth quarter because of higher levels of voice and data equipment sales. Our operating
income can also vary slightly by season. Residential segment operating income tends to be lower in
the fourth quarter due to the higher costs associated with greater subscriber acquisition during
the holiday season.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Products and services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada is our primary focus and the largest component of BCE&#146;s business. It has six
major lines of business:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>local and access services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>long distance services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>wireless services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>data services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>video services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>terminal sales and other.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Local and access services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada operates an extensive local access network that provides local telephone services
to business and residential customers. The 12&nbsp;million local telephone lines, or network access
services (NAS), we provide to our customers are key in establishing customer relationships and are
the foundation for the other products and services we offer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Local
telephone service is the main source of local and access revenues. Other sources of local and
access revenues include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>VAS, such as call display, call waiting and voicemail</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>services provided to competitors accessing our local network</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>connections to and from our local telephone service customers for competing long distance
service providers</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>subsidies from the National Contribution Fund to support local service in high-cost areas.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Rates for local telephone and VAS in our incumbent territories are regulated by the Canadian
Radio-television and Telecommunications Commission (CRTC). These regulations continue to restrict
our local and access business with respect to the bundling and packaging of local services with
other non-regulated services and with limitations on customer winback promotions. However, on
December&nbsp;11, 2006 the federal government proposed to accelerate deregulation of retail telephone
prices by implementing new forbearance criteria based on either a competitive facilities-based or
competition-based test. Under the new proposal, restrictions on customer winbacks and other
promotions would be immediately ended. In addition, the CRTC would consider each forbearance
application on a priority basis and would make a decision within 120&nbsp;days. We believe that the
federal government proposal could be adopted as early as the end of the first quarter of 2007. For
more details on regulatory issues that affect our business, see <I>The Regulatory Environment we
operate in &#151; Key regulatory issues.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The local telephone services market became increasingly competitive in 2006 as the major cable
operators in our Qu&#233;bec and Ontario markets expanded the reach of their low-priced cable telephony
services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Long distance services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We supply long distance voice services to residential and business customers. We also receive
settlement payments from other carriers for completing their customers&#146; long distance calls in our
territory.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Prices for long distance services have been declining since this market was opened to competition.
In 2006, our long distance services business continued to face intense competitive pressure given
the expanded presence of cable telephony and the continuing impact from
</DIV>

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</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">non-traditional suppliers (i.e., prepaid card, dial-around and other VoIP providers).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Wireless services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We offer a full range of wireless voice, data and paging communications products and services
to residential and business customers across Canada. We also provide an array of VAS across our
voice and data platforms such as call display and voicemail, e-mail and video-streaming, music
downloads, ringtones and games, as well as roaming services with other wireless service providers.
Customers can choose to pay for their services through a monthly rate plan (postpaid)&nbsp;or in advance
(prepaid). At the end of 2006, we had approximately 5.9&nbsp;million wireless customers and 0.3&nbsp;million
paging customers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our wireless subsidiary, Bell Mobility, provides wireless communications services nationwide under
the <I>Bell Mobility&#153;, Solo Mobile&#153; </I>and <I>Aliant Mobility&#153; </I>brands. During 2006, Solo Mobile was
repositioned in the wireless market as a value brand that broadly appeals to mass-market consumers
instead of a brand that is geared primarily towards the youth segment. In addition, we have a joint
venture with The Virgin Group to offer wireless services under the Virgin brand across Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our wireless network provides voice services, and data services at typical transmission speeds of
approximately 120 kilobits per second (Kbps) delivered over our existing single-carrier radio
transmission technology (IxRTT) network. In 2005, we launched Canada&#146;s first EVDO wireless data
network in Toronto and Montr&#233;al. EVDO technology is the third generation (3G) of wireless networks
delivering average data download speeds of 400-700 Kbps with peaks of up to 2.4 Mbps. We expect to
continue our deployment of EVDO in other major Canadian urban centres and other areas in 2007. At
the end of 2006 our wireless network covered:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>95% of the population of Ontario and Qu&#233;bec</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>approximately 90% of the population of Atlantic Canada</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the major cities in the Provinces of Alberta and British Columbia.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Data services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">High-speed Internet access service provided through DSL technology for residential and
business customers is a growth area for Bell Canada. At the end of 2006, we had approximately 2.5
million high-speed Internet customers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our DSL
high-speed Internet access footprint in Ontario and Qu&#233;bec reached more than 89% of homes
and 92% of business lines passed at the end of 2006. In Bell Aliant&#146;s territory comprised of
Atlantic Canada and rural Ontario and Qu&#233;bec, DSL high-speed Internet was available to over 70% of
homes and over 80% of businesses at the end of 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2006, we launched <I>Sympatico Optimax&#153;, </I>a premium high-speed service, delivering consistently
fast Internet services with speeds up to 16 Mbps. We also upgraded our broadband access speed for
DSL Basic customers in Ontario from 512 Kbps to 1 Mbps. We also offer a Basic Lite DSL service at
128 Kbps and an Ultra high-speed product for residential and SMB customers at 5 Mbps and 6 Mbps,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, Inukshuk completed the initial phase of its new wireless broadband network covering
five million households, representing 40% of the population in 20 urban centres across Canada.
This next-generation IP wireless network, based on pre-WiMax standards, enables portable services
allowing subscribers to access the Internet and other applications such as VoIP and video
streaming. Inukshuk was launched in 2003 to provide wireless high-speed Internet access across
Canada using spectrum in the 2.5 GHz range.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We offer a full range of data services to business customers, including Internet access, IP-based
services, ICT solutions and equipment sales. While we still offer legacy data services, we no
longer sell legacy data services other than to current customers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Video services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are Canada&#146;s largest digital television provider, nationally broadcasting over 500
all-digital video and audio channels and a wide range of domestic and international programming. We
also offer hardware including personal video recorders (PVRs), iTV services and the most extensive
line-up of HD channels in Canada. We currently distribute our video services to more than 1.8
million customers through Bell ExpressVu and Bell Canada in one of three ways:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>direct-to-home (DTH)&nbsp;satellite &#151; </I>we have been offering DTH video services nationally since
1997 and currently use four satellites: Nimiq 1, Nimiq 2, Nimiq 3, and Nimiq 4-Interim. Telesat
operates or directs the operation of these satellites.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>VDSL &#151; </I>this allows us to expand our reach to the multiple-dwelling unit (MDU)&nbsp;market. By the
end of 2006, we had signed access agreements with a total of 988 buildings and had
provisioned 514 of them.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>hybrid fibre co-axial cable &#151; </I>on August&nbsp;2,2005, we acquired the residential assets of Cable
VDN, a Montr&#233;al-based cable company selling residential analog and digital TV. Cable VDN has
over 14,600 residential cable subscribers in the Montr&#233;al area, representing an approximate
28% penetration within its current footprint. We believe that Cable VDN provides us with a
more cost effective way of addressing the MDU market in Montr&#233;al, compared to VDSL, allowing
for quicker access to smaller, harder to reach MDUs.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, we intend to continue investing in our IPTV platform that will target urban households in
markets within the Qu&#233;bec City to Windsor corridor. In 2004, we received CRTC approval of our
broadcast licence application to deliver video services terrestrially to single family units
(SFUs). We continued technical trials of our IPTV service in 2006. Bell Canada is currently
providing limited service in both Montr&#233;al and Toronto. IPTV
will offer increased inter activity  to
experience a variety of digital content on television.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signal piracy continues to be a major issue facing all segments of the Canadian broadcasting
industry. During 2006, we continued our ongoing efforts against television signal theft, including
sophisticated set-top box (STB)&nbsp;tracking systems and specific point-of-sale practices such as
obtaining customer photo identification and credit card information, aggressive measures to
investigate and initiate legal action against persons engaged in the manufacture, sale and
distribution of signal theft technology, and enforcement of policies with authorized retailers to
combat piracy, including a zero tolerance policy for activities related to signal theft.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 25
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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Terminal sales and other</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This category includes revenues from a number of other sources, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>renting, selling and maintaining business terminal equipment</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>wireless handset and video STB sales</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>network installation and maintenance services for third parties</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>IT services provided by Bell Aliant.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Wholesale business</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The wholesale business that forms part of our Other Bell Canada segment provides local
telephone, long distance, data and other services to customers who in many cases are also Bell
Canada&#146;s competitors. These wholesale customers, who are located
principally in Ontario and Qu&#233;bec
and may also be in Western Canada and the United States, resell these services or use them in
combination with their own network capabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Marketing and distribution channels</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Residential segment delivers its products and services through:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>call centre representatives</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>447 <I>Bell
World</I><SUP style="font-size: 85%; vertical-align: text-top">TM</SUP><I>/Espace
</I>Bell&#153; and <I>Bell Mobility&#153; </I>retail locations, of which 201
are corporately-owned stores with dealers owning the rest</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>over 3,800 retail points of presence through both national retailers such as Future Shop,
Best Buy, Wireless Wave, T-Booth and Costco and regional retailers such as London Drugs and
Visions in the West and Audiotronics/Dumoulin in Qu&#233;bec, in addition to a number of
independent retailers in all regions</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the bell.ca website.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Customers can buy our full range of products through the call centres, retail stores, sales
representatives and our web portals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Residential segment&#146;s large wireline customer base and our ability to sell through a
variety of distribution channels are key competitive advantages.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada also offers customers the convenience of One Bill for wireline, Bell ExpressVu and
Sympatico Internet access services with a single point of contact. In 2006, we continued migrating
Bell Mobility customers who receive a single invoice for their other Bell Canada services to One
Bill.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Communications products and services for Bell Canada&#146;s SMB customers are delivered by Bell Canada&#146;s
SMB group. They are sold through web portals, call centres, dedicated sales representatives as well
as select value-added resellers. We intend to continue to grow our share of our customers&#146; wallet
by expanding our channel mix, cross-selling data connectivity and Internet-based VAS such as
security and hosting while expanding our professional services and managed services portfolios. We
also intend to continue to focus on simplifying our processes to improve customer experience
levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Communications products and services for Bell Canada&#146;s large Enterprise customers are delivered by
Bell Canada&#146;s Enterprise group. They are sold through our web portals, call centres, dedicated
sales representatives, as well as through competitive bids that we win. In addition to basic
communications services, the Enterprise group bundles products, services and professional services
into fully managed, end-to-end, network-based business solutions for its customers. It also
partners with third parties to bid on and sell complex business solutions. We are focusing on
increasing the number of customers that buy business solutions. These offer more value, strengthen
relationships with customers and help reduce churn.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Aliant sells its products and services through call centre representatives, 265 independent
dealer stores across the six provinces in which it operates and the Bell Aliant website,
www.bell.aliant.ca. As well, Bell Aliant is able to facilitate customer payments through over 254
payment agencies in Atlantic Canada. During 2006, Bell Aliant continued efforts to implement
measures to simplify and improve various types of customer interactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Communications products and services for Bell Canada&#146;s wholesale business are delivered by Bell
Canada&#146;s Carrier Services Group. They are sold through our dedicated sales representatives, web
portals and call centres.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Networks</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The telecommunications industry continues to evolve rapidly as the industry moves from
multiple service-specific networks to IP-based integrated communications networks where text,
video, sound and voice all travel on a single network. Bell Canada and Bell Aliant continue to work
with Nortel Networks Corporation and Cisco Systems Canada, to establish a national multi-services
IP-enabled network.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada&#146;s communications networks provide voice, data, wireline and wireless services to
customers across Canada and in limited areas of the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada&#146;s infrastructure includes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>national transport for voice and data, including Internet traffic</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>urban and rural infrastructures for delivering services to customers</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>national wireless networks that provide voice and data services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>satellite and VDSL delivery of video services to customers.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our national voice and data network consists of an optical fibre network, configured as multiple
rings for redundancy and fault protection. It reaches all major metropolitan centres and many
smaller ones in Canada, as well as New York, Chicago, Washington, Atlanta, Buffalo, Detroit,
Minneapolis, Dallas, Los Angeles, San Francisco and Seattle in the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada&#146;s networks in major Canadian cities also provide state-of-the-art high-speed access at
gigabit speeds based on IP technology, while continuing to be a key provider of traditional voice
and data services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Since 2004, Bell Canada has been upgrading the access infrastructure to drive fibre to within 1 km
of its residential customers using FTTN technology. By the end of 2006, 3,612 FTTNs were deployed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In total,
our wireless network covered 95% of Ontario&#146;s and Qu&#233;bec&#146;s population and approximately
90% of Atlantic Canada&#146;s population at December&nbsp;31, 2006. Our wireless network also covers major
cities in the provinces of Alberta and British Columbia. On October&nbsp;31, 2005, Bell Canada became
the first wireless operator in Canada to launch EVDO wireless data network, a 3G digital wireless
technology which provides the company with new revenue opportunities in both the business and
residential markets. EVDO delivers data-rich content such as e-mail, video messaging, gaming, video
conferencing, telematics and streaming entertainment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">26 |&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada and Bell Aliant have extensive copper and voice-switching networks that provide
local and interexchange voice services to all of their business and residential customers in
Ontario, Qu&#233;bec and the Atlantic provinces.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2005, Bell Aliant launched an IPTV service in the Halifax market, and in 2006 continued to
expand this service in St. John&#146;s, Newfoundland and Labrador and in Moncton, Saint John, and
Fredericton in New Brunswick.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Aliant has launched Aliant IP VPN, a next generation business IP wide area network data
service, connecting customers&#146; offices and data centres throughout Atlantic Canada to the rest of
the country using Bell Canada&#146;s national multi-protocol label switching (MPLS)&nbsp;network. This
service enhances Bell Aliant&#146;s ability to provide ICT solutions that add value and efficiencies to
customers&#146; businesses. MPLS is an underlying networking technology that enables delivery of VoIP,
IP videoconferencing, IP call center applications and other future IP applications.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At December&nbsp;31, 2006, Bell Aliant also expanded its high-speed Internet service to pass more than
70% of homes and over 80% of businesses in its territories in Atlantic Canada and in rural Ontario
and Qu&#233;bec.
</DIV>
<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Other BCE segment
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Other BCE segment includes our satellite activities, primarily Telesat. For information
with respect to the sale of a significant portion of our Bell Globemedia interest and the proposed
sale of Telesat, see <I>Business highlights &#151; 2006 highlights &#151; Key acquisitions and dispositions.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Telesat</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 1972, Telesat launched the world&#146;s first commercial domestic geostationary satellite
system, established to provide satellite-based telecommunications services for Canada. Today,
Telesat provides a wide variety of video and two-way data services as well as various consulting
services dealing with all aspects of the satellite business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">It owns and operates five satellites, and leases two satellites. These satellites provide broadcast
distribution and telecommunication services to customers in North America and South America. Four
of these satellites, Nimiq 1, Nimiq 2, Nimiq 3 and Nimiq 4-Interim provide capacity and back-up
capability for Bell ExpressVu&#146;s DTH satellite television services. An additional satellite has been
leased and is expected to be brought into service in the second quarter of 2007 to replace Nimiq
4-Interim which is close to its end of life. Telesat also has two satellites, Anik F3 and Nimiq 4
under construction, which are expected to be launched in 2007 and 2008, respectively, as well as a
further satellite under contract, Nimiq 5, expected to be launched in 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;18, 2006, BCE Inc. announced the sale of Telesat to a new acquisition company formed by
PSP Investments and Loral Space &#038; Communications Inc. for $3.25&nbsp;billion. The sale is subject to
regulatory approval both in Canada and the United States and customary closing conditions, and is
expected to close in mid-2007. For more details, refer to <I>Business highlights &#151; 2006 highlights &#151;
Key acquisitions and dispositions.</I>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 27
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">The <B>Competitive Environment </B>we operate in
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Almost all of the markets that Bell Canada operates in are competitive. We face
intense competition from traditional competitors, as well as from new players, mainly cable
companies entering our markets. We compete with telecommunications and television service
providers. We also compete with other businesses and industries, including software and Internet
companies, a variety of companies that offer network services, such as providers of business
information systems, system integrators, and other companies that deal with, or have access to,
customers through various communications networks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Aliant faces a number of different competitors in each of its operating segments and across
the geographies it serves. These competitors include long distance carriers, competitive data
network providers, equipment manufacturers and retailers, systems integrators, cable companies,
Internet-based voice carriers and wireless carriers. Competition from cable companies continues to
be Bell Aliant&#146;s fastest growing and most pervasive form of competition, particularly in the
residential customer base.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CRTC regulates the prices we can charge for basic access services. See <I>The Regulatory
Environment we operate in </I>for more information. Competition affects our pricing strategies and
could reduce our revenues and lower our profitability. It could also affect our ability to retain
existing customers and attract new ones. We are under constant pressure to keep our prices and
service offerings competitive. Changes in our pricing strategies that result in price increases for
certain services or products or changes in pricing strategies by our competitors could affect our
ability to gain new customers and retain existing ones. We need to be able to anticipate and
respond quickly to the constant changes in our businesses and markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Technology substitution, and VoIP in particular, have reduced barriers to entry in the industry.
This has allowed competitors with far lower investments in financial, marketing, personnel and
technological resources to rapidly launch new products and services and gain market share. We
expect this trend to continue in the future, which could materially and negatively affect our
financial performance. Certain VoIP technology implementations do not require service providers to
own or rent physical networks, which gives other competitors increased access to this market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We already have several domestic and foreign competitors, but the number of well resourced foreign
competitors with a presence in Canada could increase in the future. In recent years, the Government
of Canada has reviewed the foreign ownership restrictions that apply to telecommunications carriers
and to broadcast distribution undertakings. Removing or easing the limits on foreign ownership
could result in foreign companies entering the Canadian market by making acquisitions or
investments. This could result in greater access to capital for our competitors or the arrival of
new competitors with global scale, which would increase competitive pressure. We cannot predict
what action, if any, the federal government will take as a result of these reviews and how it may
affect us.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Wireline
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our main competitors in local and access services are:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Allstream (a division of MTS Allstream Inc.)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Cogeco Cable Inc. (a subsidiary of Cogeco Inc.) (Cogeco), in
parts of Ontario and Qu&#233;bec</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Eastlink, in the Maritime provinces</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Futureway Communications Inc., in the greater Toronto area</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maskatel Inc., in Qu&#233;bec</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Primus Telecommunications Canada Inc. (Primus)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Rogers Cable Inc. (Rogers Cable)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Shaw Communications Inc. (Shaw), in Western Canada</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>TELUS Corporation (TELUS)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Vid&#233;otron It&#233;e (Vid&#233;otron), in Qu&#233;bec</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Vonage Canada (a division of Vonage Holdings Corp.).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Our major competitors in long distance are:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Allstream</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Cogeco, in parts of Ontario and Qu&#233;bec</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>dial-around providers, such as Yak and Looney Call, which are divisions of YAK
Communications (Canada) Inc.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Eastlink, in the Maritime provinces</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>prepaid long distance providers, such as Group of Goldline</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Primus</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Rogers Cable</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>TELUS</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Vid&#233;otron, in Qu&#233;bec</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Vonage Canada.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We face increasing cross-platform competition as customers replace traditional services with new
technologies. For example our wireline business competes with VoIP, wireless and Internet services,
including chat services, instant messaging and e-mail. We are also facing competitive pressure from
cable companies as a result of them offering voice services over their networks. Cable telephony is
being driven by its inclusion in discounted bundles and is now offered in numerous markets
including Toronto, Montr&#233;al, Qu&#233;bec City, Ottawa-Gatineau, Hamilton, London and Kitchener-Waterloo,
as well as other smaller centres. Further expansion is expected throughout 2007. The rapid rollout
of the cable companies&#146; footprints has put considerable downward pressure on our market share,
especially in the residential market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although we expect the rate of losses in our residential NAS to stabilize in 2007, this assumption
could be adversely affected by the level of intensity applied by our cable competitors in pursuing
their voice strategy. This assumption could also be adversely affected by wireline to wireless
substitution which could accelerate with the introduction of wireless number portability (refer to
<I>The Regulatory Environment we operate in &#151; Key regulatory issues &#151; Wireless number portability, </I>for
more details concerning the implementation of wireless number portability). Additional competitive
pressure is also emerging from other competitors such as electrical utilities. These alternative
technologies, products and services are making significant inroads in our legacy services, which
typically represent our higher margin business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We experience significant competition in the provision of long distance service from dial-around
providers, prepaid card providers, VoIP service providers, cable companies and others, and from
traditional competitors, such as interexchange carriers and resellers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">28 |&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>



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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Competition for contracts to supply long distance services to large business customers is
very intense. Customers may choose to switch to competitors that offer lower prices to gain market
share. Such competitors may be less concerned about the quality of service or impact on their
margins than we are. Competitors are also offering IP-based telephony to business customers at
attractive prices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In Bell Aliant&#146;s residential markets, competition for most product lines is maturing. Competition
for local telephone service is most mature in Nova Scotia and Prince Edward Island, where it has
existed in the residential market since 1999. In 2006, the competitive local service market
expanded, with the introduction of local service competition in New
Brunswick, Ontario and Qu&#233;bec.
In this increasingly competitive residential local service market, Bell Aliant differentiates
itself by offering innovative customer solutions, investing in advanced networks, focusing on
customer experience, and building its brand through involvement in the communities it serves.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the business customer base, Bell Aliant is experiencing competition from new sources, most
notably IT consulting companies that are increasingly acting as sellers of IP telephony and data
solutions for business customers. Bell Aliant&#146;s strength is the integration of information and
communications technology solutions, and building deep expertise in selected industry verticals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These competitive factors suggest that the number of our legacy wireline customers and long
distance volumes will continue to decline in the future. Continued decline will lead to reduced
economies of scale in those businesses and, in turn, lower margins. Our strategy is to mitigate
these declines through cost reductions and by building the business for newer growth services but
the margins on newer services will likely be less than the margins on legacy services. If legacy
service revenues decline faster than the rate of growth in revenues of our newer services, our
financial performance could be negatively and materially affected. In addition, if a large portion
of the customers who stop using our voice services also cease using our other services, our
financial performance could be negatively and materially affected. Bringing to market new growth
products and services is inherently risky as it requires capital and other investments while the
demand for the products or services is uncertain. It may also require us to compete in areas
outside our core connectivity business against highly capable global information technology service
providers. The launch of new products or services could be delayed or cancelled due to reductions
in the amount of available capital to be invested.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Wireless
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Canadian wireless telecommunications industry is highly competitive. We compete directly
with other wireless service providers, including resellers known as mobile virtual network
operators, that aggressively introduce, price and market their products and services. We also
compete with wireline service providers. We expect competition to intensify as new technologies,
products and services are developed. For example, mobile handsets that connect to wireless Internet
access networks are now available from a number of manufacturers and service providers. If these
products significantly penetrate the marketplace, usage of our wireless network may decline which would adversely affect our wireless revenues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, competition could also increase as a result of Industry Canada&#146;s intention to initiate
a consultation which could result in the licensing of additional mobile spectrum (refer to <I>The
Regulatory Environment we operate in &#151; Consultations &#151; Additional mobile spectrum, </I>for more details
on this subject).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Furthermore, wireless number portability could increase churn beyond our current expectations and
adversely affect our estimates concerning our expected number of wireless subscribers in 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Mobility competes for cellular and PCS customers, dealers and retail distribution outlets
directly with:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Rogers Wireless Inc. (including its subsidiary Fido Inc.) (Rogers Wireless)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>TELUS Mobility (a business unit of TELUS).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Competition for subscribers to wireless services is based on price, services and enhancements,
technical quality of the cellular and PCS system, customer service, distribution, coverage and
capacity.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Internet access
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We compete with cable companies and ISPs to provide broadband and dial-up Internet access and
related services. In particular, cable companies have focused on increased bandwidth and discounted
pricing on bundles to compete against us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Regional electrical utilities continue to develop and market services that compete directly with
Bell Canada&#146;s Internet access services. Developments in wireless broadband services may also lead
to increased competition in certain geographic areas. This could materially and negatively affect
the financial performance of our Internet access services business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There is a risk that should the pace of our FTTN roll-out be slower than currently contemplated in
our business plan, our broadband ISP churn rate could increase beyond our current expectations
thereby adversely affecting our expected number of Internet subscribers in 2007. With the rapid
growth in video applications on the Internet, there is also a risk that we will need to incur
significant capital expenditures to provide additional capacity on our <I>Sympatico&#153; </I>Internet network
which costs we may not be able to recover initially from customers due to competitors&#146; short term
pricing of equivalent Internet services. This could have a material adverse effect on our results
of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the high-speed Internet access services market, the Residential segment competes with large
cable companies, such as:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Cogeco</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Eastlink, in the Maritime provinces</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Persona Communications Corp.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Rogers Cable</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Vid&#233;otron.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the dial-up market, the Residential segment competes with America Online, Inc., Primus and
approximately 400 ISPs.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 29
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Video
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Competition for subscribers is based on the number and kinds of channels offered, quality of
the signal, set-top box features, availability of service in the region, price and customer
service. Bell ExpressVu and Bell Canada compete directly with Star Choice Television Network Inc.,
another DTH satellite television provider, and with cable companies across Canada. These cable
companies have upgraded their networks, operational systems and services, which has improved their
competitiveness. This could materially and negatively affect the financial performance of Bell
ExpressVu and Bell Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada has received a licence to offer video on a wireline basis. See <I>The Regulatory
Environment we operate in &#151; Broadcasting Act </I>for more information on Bell Canada&#146;s licence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada offers video services through DTH Satellite, VDSL and hybrid fibre co-axial cable. We
continued technical trials of our IPTV service in 2006. Bell Canada is currently providing limited
service in both Montr&#233;al and Toronto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell ExpressVu continues to face competition from unregulated U.S. DTH satellite television
services that are illegally sold in Canada. In response, we are participating in legal actions that
are challenging the sale of U.S. DTH satellite television equipment in Canada. This competition
could have a material and adverse impact on the business of Bell ExpressVu and Bell Canada. Bell
ExpressVu and Bell Canada&#146;s competitors also include Canadian cable companies, such as:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Cogeco</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Eastlink, in the Maritime Provinces</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Persona Communications Corp.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Rogers Cable</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Shaw</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Vid&#233;otron.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Wholesale
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our wholesale business&#146; main competitors include traditional carriers and emerging carriers.
Traditional, facilities-based competitors include Allstream and TELUS who may wholesale some or all
of the same products and services as Bell Canada. Emerging competitors include utility-based
telecommunications providers, cable operators and U.S.-based carriers for certain services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Competitive activity for tariffed services (e.g. Centrex and digital private line services) is
moderate, with facilities-based carriers providing the primary threat in regulated voice and data
access products. Competition is greatest in the unregulated areas, especially for toll minutes and
forborne data services. For example, in the data market for private line and other products, we
face continued price pressure as well as the ongoing threat of customers evolving to IP-based
services. Our resale DSL market, however, continues to grow. The recent growth of end-user
technologies such as VoIP is also expected to increase pressure on some legacy product lines.
</DIV>

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</DIV>



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<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">The <B>Regulatory Environment </B>we operate in
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section describes the legislation that governs our businesses, and provides
highlights of government consultations and recent regulatory initiatives and proceedings
affecting us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our business is affected by decisions made by various regulatory agencies, including the CRTC. The
CRTC, an independent agency of the Government of Canada, is responsible for regulating Canada&#146;s
telecommunications and broadcasting services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CRTC may decide not to regulate all or part of certain services or classes of
telecommunications services if it determines there is enough competition to protect the interests
of users. For example, many of the decisions of the CRTC indicate that they try to balance requests
from competitors for access to facilities, such as the telecommunications networks, switching and
transmission facilities, and other network infrastructure of incumbent telephone companies, with
the rights of the incumbent telephone companies to compete reasonably freely. There is a risk that
decisions of the CRTC, and in particular the decisions relating to prices at which we must provide
such access, may have a negative effect on our business and results of operations. The CRTC may
also exempt broadcasting undertakings from complying with certain licensing and regulatory
requirements if the CRTC is satisfied that complying with those requirements will not materially
affect the implementation of Canadian broadcasting policy.
</DIV>
<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Legislation that governs our business
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada, Bell Aliant and several of Bell Canada&#146;s direct and indirect subsidiaries and
associated companies, including NorthernTel, T&#233;l&#233;bec, Northwestel, Bell Mobility and Bell ExpressVu
are regulated by the CRTC. Other aspects of the businesses of these companies are regulated in
various ways by federal government departments, in particular Industry Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Telecom
Policy Review Panel&#146;s final report</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
March&nbsp;22, 2006, the Telecommunication Policy Review Panel (Panel), a panel of experts
appointed by the Minister of Industry to review Canada&#146;s telecommunications policy and regulatory
framework and make recommendations, released its final report. The Panel&#146;s 127 recommendations
included a blueprint for broad fundamental reform of the regulatory framework for
telecommunications, the development of a national ICT strategy and the creation of a program to
make the availability of broadband as widespread as telephone service. The Panel&#146;s report calls for
many changes to the regulatory environment that could have a material impact on our business
performance. The thrust of the report is that the state of competition in Canada has progressed to
the point where, at least for economic regulation, the CRTC should remove most of its existing
regulation and instead rely on market forces.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Panel calls for short-term changes to regulation through a variety of federal government
programs and, more significantly, through a policy direction &#151; an instrument whereby the Cabinet
can give binding directions on general policy to the CRTC. The Panel also calls for significant
changes to the <I>Telecommunications Act.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Panel also recommends a relaxation of Canada&#146;s foreign ownership restrictions as they apply to
telecommunications common carriers. In addition to the recommendations addressing wireline
regulation, the Panel also makes a number of recommendations separately addressing issues related
to wireless regulation in Canada. These included, among other things, a recommendation for the
continued use of regulatory mechanisms such as spectrum caps (aggregation limits) where spectrum is
scarce to provide an opportunity for new entrants to acquire spectrum in order to have an expanded
choice of service providers. Other recommendations concerning competitive access to wireless
antennae sites and support structures could serve to facilitate competitive entry into the Canadian
wireless industry. If implemented, the cumulative effect of such recommendations could have a
negative effect on our business and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Policy direction</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Since the report&#146;s release, the federal government has taken several steps to implement the
Panel&#146;s recommendations. On June&nbsp;13, 2006, the Minister of Industry issued a policy direction to
the CRTC directing it to rely on market forces to the maximum extent feasible and to design
regulations that &#147;interfere with the operation of competitive market forces to the minimum extent
necessary&#148; (Policy Direction). The Regulatory Impact Statement of the Policy Direction stated:
&#147;Issuing a policy direction formally states the government&#146;s vision and enables timely change
towards more market-oriented regulation in advance of any potential legislative changes.&#148; The
Policy Direction came into force &#151; after a public consultation process &#151; on December&nbsp;14, 2006. The
CRTC is bound to follow the Policy Direction in making its decisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;15, 2006 &#151; citing the Policy Direction &#151; the Minister of Industry announced that the
government had varied the CRTC&#146;s Telecom Decision CRTC 2005-28, <I>Regulatory Framework for Voice
Communications Services Using Internet Protocol, </I>instructing the CRTC to refrain from economic
regulation of certain access-independent VoIP services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;7, 2006 the Minister of Industry tabled Bill C-41 <I>An Act to Amend the Competition Act</I>
in the House of Commons. Bill C-41 would give the Competition Bureau the power to impose fines or
Administrative Monetary Penalties (AMPs) of up to $15&nbsp;million in cases of abuse of dominance in the
telecommunications sector.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Bell Canada Act</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the <I>Bell Canada Act, </I>the CRTC must approve any sale or other disposal of Bell Canada
voting shares that are held by BCE Inc., unless the sale or disposal would result in BCE Inc.
retaining at least 80% of all of the issued and outstanding voting shares of Bell Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Telecommunications Act</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Telecommunications Act </I>governs telecommunications in Canada. It defines the broad
objectives of Canada&#146;s telecommunications policy and gives the government the power to give general
direction to the CRTC on any of these objectives. It applies to several of the Bell Canada
companies and partnerships, including Bell Canada, Bell Mobility, Bell Aliant, NorthernTel,
Northwestel and T&#233;l&#233;bec.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 31
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the <I>Telecommunications Act, </I>all telecommunications common carriers must seek regulatory
approval for all proposed tariffs for telecommunications services, unless the services are exempt
or are not regulated. The CRTC may exempt an entire class of carriers from regulation under the
<I>Telecommunications Act </I>if the exemption meets the objectives of Canada&#146;s telecommunications policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Telecommunications Act </I>includes the following ownership requirements for companies, such as
Bell Canada, Bell Aliant LP or Bell Mobility, that operate as telecommunications common
carriers:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>they must be eligible to operate as Canadian carriers</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>they must be Canadian owned and controlled corporations. Direct ownership must be at least
80% Canadian and indirect ownership, such as indirect ownership by BCE Inc., must be at least
66<SUP style="font-size: 85%; vertical-align: text-top">2</SUP>/<SUP style="font-size: 85%; vertical-align: text-bottom">3</sup>% Canadian</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>they must not otherwise be foreign controlled</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at least 80% of the members of their board of directors must be Canadian.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. monitors and periodically reports on the level of non-Canadian ownership of its common
shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;25, 2005, Bill C-37, <I>An Act to Amend the Telecommunications Act, </I>received Royal Assent.
Bill C-37 provides for the establishment of a National Do Not Call List to reduce the volume of
unsolicited telemarketing calls Canadians receive. It permits the CRTC to administer AMPs to
parties who contravene the prohibitions regarding unsolicited telemarketing set out in the Bill
C-37 and to be set out in the regulations to be established after the CRTC completes a public
proceeding which began on February&nbsp;20, 2006. It is not certain when the National Do Not Call List
will be operational.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Broadcasting Act</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Broadcasting Act </I>assigns the regulation and supervision of the broadcasting system to
the CRTC. Key policy objectives of the <I>Broadcasting Act </I>are to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>protect and strengthen the cultural, political, social and economic fabric of Canada</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>encourage the development of Canadian expression.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Most broadcasting activities require a broadcasting licence or broadcasting distribution licence
from the CRTC. A corporation must meet the following ownership requirements to obtain a
broadcasting or a broadcasting distribution licence:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it must be Canadian owned and controlled. At least 80% of all outstanding and issued voting shares and at least 80% of the votes must be beneficially owned directly by Canadians</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it must not otherwise be controlled by non-Canadians</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at least 80% of the board of directors, as well as the chief executive officer, must be
Canadian</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at least 66<SUP style="font-size: 85%; vertical-align: text-top">2</SUP>/<SUP style="font-size: 85%; vertical-align: text-bottom">3</sup>% of all outstanding and issued voting shares, and at least
66<SUP style="font-size: 85%; vertical-align: text-top">2</SUP>/<SUP style="font-size: 85%; vertical-align: text-bottom">3</sup>% of the votes of the parent corporation, must be beneficially owned and
controlled, directly or indirectly, by Canadian interests.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If the parent corporation of a broadcasting licensee has fewer than 80% Canadian directors on its
board of directors, a non-Canadian chief executive officer or less than 80% Canadian ownership, the
parent corporation must demonstrate to the CRTC that it or its directors do not have control or
influence over any of the broadcasting licensee&#146;s programming decisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Corporations must have the CRTC&#146;s approval before they can transfer effective control of a
broadcasting licensee. The CRTC may impose certain requirements, including the payment of certain
benefits, as a condition of the transfer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell
Canada holds broadcasting distribution licences for major centres in
Ontario and Qu&#233;bec. In
addition, four of our partnerships or subsidiaries
&#151; Bell ExpressVu, Bell Aliant LP, Northwestel and Cablevision du Nord
du Qu&#233;bec Inc., a T&#233;l&#233;bec
subsidiary &#151; have broadcasting distribution licences that allow them to offer services. Bell
ExpressVu is permitted to offer services nationally. Bell Aliant LP is permitted to offer services
in Newfoundland and Labrador, Nova Scotia and New Brunswick. T&#233;l&#233;bec is permitted to offer services
in specific areas of Ontario and Qu&#233;bec. Northwestel is permitted to offer services in specific
areas of the Northwest Territories.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Bell Canada (terrestrial)&nbsp;licences will enable Bell Canada to deliver television using its IPTV
platform. We continued technical trials of our IPTV service in 2006. Bell Canada is currently
providing limited service in both Montr&#233;al and Toronto. Bell ExpressVu also holds licences for
Pay-per-view (for both DTH and terrestrial distribution) and video on demand (for terrestrial
distribution).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Radiocommunication Act</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Industry Canada regulates the use of radio spectrum by Bell Canada, Bell Mobility and other
wireless service providers under the <I>Radiocommunication Act. </I>Under the Act, Industry Canada ensures
that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>radio communication in Canada is developed and operated efficiently</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the set up of, and any changes to, radio stations are implemented in an orderly manner.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Minister of Industry has the discretion to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>issue radio licences</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>set technical standards for radio equipment</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>establish licensing conditions</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>decide how radio spectrum is allocated and used.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the <I>Radiocommunication Regulations, </I>companies that are eligible for radio licences, such as
Bell Canada and Bell Mobility, must meet the same ownership requirements that apply to corporations
under the <I>Telecommunications Act.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Radiocommunication Act </I>contains provisions which make it a criminal offence to manufacture,
offer for sale or sell any device used to decode an encrypted subscription signal in connection
with unauthorized reception of satellite signals. Bell ExpressVu, Bell Canada, the Canadian
Association of Broadcasters, and members of Canada&#146;s production community continue to encourage the
Government of Canada to strengthen the <I>Radiocommunication Act </I>in order to combat the black market
in signal theft.
</DIV>

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</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Key regulatory issues
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section describes key regulatory issues which have been addressed in past years that
have influenced our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Commitment under the CRTC deferral account mechanism</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;16, 2006, the CRTC issued Telecom Decision CRTC 2006-9, where it concluded on the
ways that incumbent telephone companies should clear the accumulated balances in their deferral
accounts. On September&nbsp;1, 2006, Bell Canada and Bell Aliant filed their proposals for clearing the
accumulated balances in their deferral accounts. If approved by the CRTC, the proposals would
improve access to communications for persons with disabilities (5% of estimated balance) and extend
broadband access to some 220,000 potential customers in 264
communities across Ontario and Qu&#233;bec
where it would not otherwise be made available on a commercial basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;30, 2006, the CRTC issued Public Notice CRTC 2006-15 initiating a proceeding to assess
these proposals. A decision in this proceeding is scheduled to be issued in January&nbsp;2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada&#146;s accumulated deferral account balance at December&nbsp;31, 2006 is estimated to be $479
million with an estimated future annualized commitment of $24&nbsp;million. Bell Aliant&#146;s accumulated
deferral account balance at December&nbsp;31, 2006 is estimated to be $8&nbsp;million with no estimated
future annualized commitment. Due to the nature and number of uncertainties which remain concerning
the disposition of accumulated balances in the deferral account, we are unable to estimate the
impact of the CRTC&#146;s decision on our financial results at this time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Price cap framework review</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;9, 2006, the CRTC issued Telecom Public Notice CRTC 2006-5 initiating a proceeding to
establish the price cap framework to replace the existing framework that ends on May&nbsp;31, 2007. On
July&nbsp;10, 2006, Bell Canada, Bell Aliant and Saskatchewan Telecommunications Holdings Corporation
(SaskTel) filed a pricing framework proposal that reflects the significant changes that have taken
place in the industry. The new framework would come into effect on June&nbsp;1, 2007 and apply for a
period of two years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We proposed that the price cap should be removed in areas where services are available via
alternative facilities, allowing consumers and competition in these areas to drive market prices.
In areas where alternative facilities are not available, we proposed that service prices remain
subject to regulation with upward pricing capped, on average, at current levels. In keeping with
both the recommendations of the Panel and the Policy Direction, our proposal would interfere with
market forces to the least extent possible. The evidence was subject to an interrogatory process as
well as a public hearing which took place in October&nbsp;2006. The CRTC intends to issue a decision on
this proceeding by April&nbsp;30, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There is a risk that the CRTC may not accept our proposal to rely on market forces to the maximum
extent possible and may continue to impose limitations on our marketing flexibility, impeding our
ability to respond to market forces.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Review of regulatory framework for wholesale services</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As required by the Policy Direction, on November&nbsp;9, 2006, the CRTC released Public Notice
CRTC 2006-14 in which it initiated a comprehensive review of the regulatory framework requiring
incumbent telephone companies to provide wholesale access to certain telecommunications services to
competitors. As part of this review, the CRTC will examine the appropriate definition of essential
services and the pricing principles for such services. In addition, the regulatory treatment for
non-essential services will also be examined. A final decision is expected in July&nbsp;2008. There is
no guarantee that the CRTC will issue a favourable decision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Competitor Digital Network (CDN)&nbsp;services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;3, 2005, the CRTC released Telecom Decision CRTC 2005-6 on CDN services. This
decision set the rates, terms and conditions for the provision of digital network services by Bell
Canada, Bell Aliant and the other incumbent telephone companies to their competitors. The CRTC
determined that CDN services should include not only digital network access components but also
intra-exchange facilities, inter-exchange facilities in certain metropolitan areas, and
channelization and co-location links (expanded CDN services). This decision affected Bell Canada
and Bell Aliant as providers of CDN services in their own operating territories and as purchasers
of those services elsewhere in Canada. There are two important financial aspects to note in this
decision:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the prices for all new CDN services were applied on a going-forward basis, as of the date of
the decision, and Bell Canada and Bell Aliant will be relieved of some of their obligations
from the deferral account for the revenue losses from this decision</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Bell Canada&#146;s and Bell Aliant&#146;s obligations under the deferral account will also be reduced
for applying lower rates retroactively for the CDN access components that were tariffed at
interim rates prior to the decision.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;2, 2007 and February&nbsp;15, 2007, the CRTC released Telecom Decisions CRTC 2007-6 and
2007-10 respectively, regarding the matters unresolved in Telecom Decision 2005-6 pertaining to the
terms and conditions of CDN services. In these rulings the CRTC determined that certain retail
service components did not apply to CDN services. Bell Canada and Bell Aliant will be compensated
through the deferral account for applying refunds retroactively, and for rate reductions on a
going-forward basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Forbearance from regulation of local exchange services</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On April&nbsp;6, 2006, the CRTC issued Telecom Decision CRTC 2006-15, which established a
framework for the forbearance from regulation of local exchange services. The decision denied Bell
Aliant&#146;s application for regulatory forbearance in 32 exchanges in Nova Scotia and Prince Edward
Island. The denial of Bell Aliant&#146;s forbearance application in respect of the Halifax market is the
subject of an appeal to the Federal Court of Appeal by Bell Aliant. The Federal Court of Appeal
granted Bell Aliant&#146;s leave to appeal the decision in an order dated September&nbsp;22, 2006.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;12, 2006, Bell Canada, Bell Aliant, SaskTel and TELUS filed a petition to the
Governor-in-Council requesting that the Minister of Industry recommend to the Governor-in-Council
that Decision 2006-15 be referred back to the CRTC for reconsideration. Specifically, the companies
requested that the CRTC be directed to reconsider the pre-forbearance, forbearance and
post-forbearance rules in Decision 2006-15 in light of the conclusions and recommendations
contained in the Telecom Panel&#146;s final report issued in March&nbsp;2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;16, 2006, the CRTC issued Telecom Public Notice CRTC 2006-9, in which it sought comments
regarding whether mobile wireless services, or a subset of them, should be considered in the market
share loss calculation for local forbearance analysis purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;1, 2006, the CRTC issued Telecom Public Notice CRTC 2006-12 in which it sought
comments regarding whether the &#147;transitional&#148; market share loss threshold of 20% as a precondition
to the repeal of the winback rule and the market share loss threshold of 25% for forbearance
established in Decision 2006-15 are appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On October&nbsp;5, 2006, TELUS applied to the CRTC to review and vary one of the forbearance criteria
defined in Decision 2006-15. TELUS&#146; application requests that the CRTC remove or amend the
forbearance criterion requiring incumbent telephone companies to meet certain wholesale quality of
service standards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;11, 2006, the Minister of Industry announced a government proposal to change Decision
2006-15 to accelerate deregulation of retail prices of the incumbent telephone companies&#146; local
exchange services. The Minister had separately proposed amendments to the <I>Competition Act </I>to deter
anticompetitive behaviour in the telecommunications industry. The proposed order to vary Decision
2006-15 establishes a forbearance test which (i)&nbsp;is based on the presence of competitors in
geographic areas that are smaller and (ii)&nbsp;amends the forbearance criteria related to meeting
certain quality of service indicators for incumbent telephone companies&#146; wholesale services. The
proposed order would also streamline the forbearance process and eliminate the winback and
promotional restrictions in regulated and deregulated areas. The federal government is considering
the comments received and must make a final determination by April&nbsp;6, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In light of the federal government&#146;s proposal to change Decision 2006-15, the CRTC deferred its
consideration of the issues in Public Notice 2006-9, Public Notice 2006-12 and TELUS&#146; review and
vary application noted above, pending a final determination with respect to the proposed order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although the proposed changes to Decision 2006-15 are positive for us, there can be no guarantee
that the order will be issued or that the order will not be amended prior to its issuance.
Furthermore, there is no guarantee that the outcomes of any of these proceedings will be issued or
that the order will improve the likelihood that or speed with which, Bell Canada and Bell Aliant
will be granted forbearance for local exchange services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Winback rules</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On April&nbsp;6, 2006, the CRTC issued decisions relating to winbacks, namely Telecom Decisions
CRTC 2006-15 and 2006-16.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In Decision 2006-15, the CRTC reduced the length of the no-winback period for residential customers
to 3&nbsp;months from 12&nbsp;months. Under the amended winback rule, incumbent telephone companies are now
precluded from contacting former residential and business local exchange service customers from the
time of the local service request until 3&nbsp;months after their local service is transferred to a
competitor. In Decision 2006-15, the CRTC also ruled that incumbent telephone companies may apply
to have the winback rule repealed in any local market where they have lost 20% of market share and
in which they have met the relevant competitor quality of service indicators in the 3&nbsp;months
preceding the date of the application.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In Decision 2006-16, the CRTC determined that the winback rule is constitutional because it is
justifiable under the <I>Canadian Charter of Rights and Freedoms </I>(Charter). The CRTC also decided
that, going forward, incumbent telephone companies are now permitted to market non-residential
local telecommunications services to a former local exchange customer during, and following, the
3-month no-winback period if that customer did not switch those other services to the competitor at
the same time they migrated their local service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Following applications filed by Bell Canada, Bell Aliant, SaskTel and TELUS, the Federal Court
of Appeal granted leave to appeal these decisions in an Order dated September&nbsp;22, 2006. Bell
Canada&#146;s and Bell Aliant&#146;s flexibility to compete may continue to be encumbered if the Federal
Court of Appeal determines that the winback rule is constitutional.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;18, 2006, the CRTC released Telecom Decision CRTC 2006-28, <I>Regulatory issues related to the
implementation of wireless number portability. </I>In that decision the CRTC confirmed that the winback
restrictions on incumbent telephone companies do not apply to a wireline-to-wireless port request
by a customer in the context of wireless number portability so there will be no restrictions on the
ability of either Bell Canada or Bell Mobility to contact a wireline or wireless customer who has
transferred to a competitor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As indicated above, on December&nbsp;11, 2006, the Minister of Industry announced a government proposal
to change Decision 2006-15 to, among other things, eliminate the winback and promotional
restrictions in regulated and deregulated areas.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Wireless number portability</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Government of Canada in its 2005 Budget announced that it intended to ask the CRTC to
implement wireless number portability. Number portability enables customers to retain the same
phone number when changing service provider within the same local serving area. On December&nbsp;20,
2005, the CRTC released Telecom Decision CRTC 2005-72. Among other things, the decision directed
Bell Mobility, Rogers Wireless and TELUS Mobility to implement wireless number portability in
Alberta, British Columbia, Ontario and Qu&#233;bec by March&nbsp;14, 2007.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In Telecom Decision CRTC 2006-28, <I>Regulatory issues related to the implementation of wireless
number portability &#151; Follow-up to Public Notice 2006-3, </I>issued on May&nbsp;18, 2006, the CRTC made a
number of policy determinations covering a wide range of implementation issues and requested that
three CRTC Interconnection Steering Committee working groups undertake various tasks and file
reports with the CRTC. In Telecom Decision CRTC 2006-74 issued on November&nbsp;22, 2006, the CRTC
approved with one change the consensus reports. In an application dated May&nbsp;12, 2006, Bell Canada
requested that it be allowed to recover wireline costs related to the implementation of wireless
number portability through a drawdown from Bell Canada&#146;s deferral account. The CRTC has requested
further information from Bell Canada on its application and responses were filed on December
4, 2006. There is no guarantee the CRTC will issue a favourable decision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Retail quality of service indicators</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;24, 2005, the CRTC released Telecom Decision CRTC 2005-17 which, among other things,
established the rate adjustment plan to be applied when incumbent telephone companies do not meet
mandated standards of quality of service provided to their retail customers. As a result of this
decision, incumbent telephone companies are subject to a penalty mechanism when they do not meet
one or more service standards for their retail services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the penalty period of January 1 to December&nbsp;31, 2005, the CRTC standard for several indicators
was not met on an annual average basis because of the strike in 2005 by the CEP at Entourage (now
Bell Technical Solutions). Bell Canada has requested that the CRTC approve its December&nbsp;5, 2005
application for the purpose of excluding below-standard strike-related results as a <I>force majeure</I>
type exclusion. However, there is no assurance that the CRTC will issue a favourable decision and
Bell Canada may be required to pay a penalty of up to $18&nbsp;million. It is not expected that Bell
Canada will be required to pay any penalties related to retail quality of service for the period
from January 1 to December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CRTC determined that Bell Aliant did not meet certain service standards during the period from
January 1 to December&nbsp;31, 2004. Bell Aliant applied to the CRTC for an exclusion from having to pay
a penalty in 2004, as well as in 2005, due to below-standard service results caused by its labour
disruption in 2004. In Telecom Decision CRTC 2006-27, which was issued on May&nbsp;16, 2006, the CRTC
determined that the labour disruption was partially, but not totally, beyond the control of Bell
Aliant. In total, Bell Aliant was directed to provide customer credits totalling $3.5&nbsp;million on
its customers&#146; monthly bills starting no later than June&nbsp;16, 2006. These customer credits have been
applied.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At the same time, Bell Aliant has filed with the CRTC an application to review and vary Decision
2005-17, as applied in Decision 2006-27, so as to indicate that when quality of service is
negatively affected by a labour stoppage, the CRTC will impose penalties only where a telephone
company has been found to have violated labour relations law or policy, or where it has
deliberately sacrificed quality of service to increase profits. The application also seeks a
remedial order to recover the cost of the credits already provided to customers. It is likely that
the CRTC will not deal with Bell Canada&#146;s December&nbsp;5, 2005 application until it reaches a decision
on Bell Aliant&#146;s application. The Federally Regulated
Employers &#151; Transportation and Communications (FETCO), a national organization representing
employers and employer associations across Canada, has also filed a petition with the
Governor-in-Council to vary or rescind Decision 2006-27 on the basis that it oversteps the CRTC&#146;s
jurisdiction and puts at risk well-balanced and well-defined Canadian labour relations policies and
law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Application to change bundling rules</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;2, 2005, Bell Canada applied to the CRTC to modify the bundling rules that apply
to customer-specific arrangements (CSAs). CSAs are arrangements tailored to a particular customer&#146;s
needs for the purpose of customizing the offering in terms of rate structure and levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CRTC currently requires any CSA involving both tariffed and non-tariffed services (Mixed CSAs)
to be filed for approval with the CRTC before it can be provided to customers. Bell Canada&#146;s
proposal would exempt a Mixed CSA from the bundling rules and associated tariff requirements if the
total revenue from the CSA is higher than the price of the tariffed components of the CSA and the
CSA is not part of a practice designed to circumvent tariffs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada&#146;s and Bell Aliant&#146;s flexibility to compete may continue to be encumbered if the
proposal is not approved.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Bell ExpressVu</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell ExpressVu is subject to programming and carriage requirements under CRTC regulations.
Changes to the regulations that govern broadcasting could negatively affect Bell ExpressVu&#146;s
competitive position or the cost of providing its services. Bell ExpressVu&#146;s DTH satellite
television distribution undertaking licence was renewed in
March&nbsp;2004 and expires on August 31, 2010. While we expect this licence will be renewed at term, there is no assurance that this will
happen.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November, 2006, the CRTC held a public hearing to review certain aspects of the regulatory
framework for over-the-air broadcasters. Among the issues addressed was the possibility of
requiring cable and satellite operators to pay over-the-air broadcasters for the right to carry
their signals. Under the current copyright and regulatory framework, over-the-air broadcasters are
not compensated by cable and satellite operators for distribution of their signals. Bell ExpressVu,
along with the cable operators, argued vigorously against a fee-for-carriage regime. A decision is
expected in the second quarter of 2007. A decision from the CRTC requiring cable and satellite
operators to pay over-the-air broadcasters could have a negative effect on our business and results
of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In December&nbsp;2006, the Federal Court of Canada ruled that the Part&nbsp;II Licence Fees, levied by the
CRTC to recover Industry Canada costs associated with broadcasting spectrum management and paid by
broadcasters and broadcast distributors, are an illegal tax. These fees represent 1.365% of Bell
ExpressVu&#146;s annual revenue. The Court&#146;s decision is being appealed by the federal government and
the Canadian Association of Broadcasters.
</DIV>

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<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Consultations
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">From time to time, Industry Canada initiates proceedings that allow members of the
telecommunications industry to comment on technical and policy issues. This ensures that Industry
Canada takes into consideration the opinions of the industry when it is making decisions that
affect the industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Licences and changes to wireless regulation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Licences</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Companies must have a spectrum licence to operate cellular, PCS and other
radio-telecommunications systems in Canada. The Minister of Industry awards spectrum licences,
through a variety of methods, at his or her discretion under the <I>Radiocommunication Act. </I>While we
expect that the licences under which we provide cellular and PCS services will be renewed at term,
there is no assurance that this will happen. Industry Canada can revoke a company&#146;s licence at any
time if the company does not comply with the licence&#146;s conditions. While we believe that we comply
with the conditions of our licences, there is no assurance that Industry Canada will agree. Should
there be a disagreement, this could have a material and negative effect on us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a result of an Industry Canada decision, the cellular and PCS licences under which we provide
service, which would have expired on March&nbsp;31, 2006, will now expire in 2011. The PCS licences that
were awarded in the 2001 PCS auction will expire on November&nbsp;29, 2011. As a result, our cellular
and PCS licences are now classified as &#147;spectrum licences&#148;, that is licences issued on a geographic
basis rather than on a radio site-by-radio site basis, with a standard 10-year licence term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Wireless and radio towers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2005, Industry Canada released a report concerning its procedures for approving and
placing wireless and radio towers in Canada, including the role of municipal authorities in the
approval process. Among other things, the report recommends that the authority to regulate the
siting of antennae and supporting structures remain exclusively with the Government of Canada. In
August&nbsp;2005, Industry Canada presented a revised draft policy for comment. The wireless and
broadcasting industries both have a number of concerns with the draft policy and are now working
with Industry Canada to attempt to resolve these concerns. However, there has been no recent
activity on this issue and it is not possible to predict at this time if or when the final policy
will be issued. If the final policy requires more municipal or public consultation in the approval
process, there is a risk that it could significantly slow the expansion of wireless networks in
Canada. This could have a material and negative effect on our operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Additional mobile spectrum</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;16, 2007, Industry Canada initiated a consultation that could result in the
licensing of additional mobile spectrum for advanced wireless services in the 1.6, 1.7 and 2.1 GHz
bands. The consultation could also make an additional 10 MHz of PCS spectrum available in the 1.9
GHz band. In total, the consultation could make 105 MHz of spectrum available, to be licensed
through a competitive spectrum auction likely occurring in early 2008. The consultation seeks
comments on a variety of policy and technical issues related to the spectrum, including whether any
of the spectrum should be set aside for new entrants. Industry Canada is also seeking comments on
whether spectrum caps could be used as an alternative method of facilitating new competitive entry
into the Canadian wireless market. Furthermore, Industry Canada is seeking comments concerning the
policies related to wireless antennae towers, and whether digital roaming should be mandated among
all carriers. The adoption of such measures would strongly facilitate the introduction of new
competitor(s) into the Canadian wireless market and would heighten the degree of competition in the
already highly competitive wireless segment. Comments are due to be filed with Industry Canada by
May&nbsp;25, 2007 with reply comments due by June&nbsp;27, 2007.
</DIV>

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<DIV align="left">
<A name="122"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>Legal Proceedings </B>we are involved in
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We become involved in various claims and litigation as a part of our business. This
section describes important legal proceedings that you should be aware of. While we cannot predict
the final outcome of the claims and litigation described below or of any other pending claims and
litigation at March&nbsp;7, 2007, based on the information currently available, management believes that
the resolution of these claims and litigation will not have a material and negative effect on our
consolidated financial position or results of operations. Based on the information currently
available, we believe that we have strong defenses and we intend to vigorously defend our position.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Lawsuits related to Bell Canada
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Purported class action concerning wireless access charges</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;9, 2004, a statement of claim was filed under the <I>Class&nbsp;Actions Act </I>(Saskatchewan)
in the Court of Queen&#146;s Bench, Judicial Centre of Regina, Saskatchewan against wireless
communications services providers, including Bell Mobility and Aliant Telecom, by certain alleged
customers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The statement of claim alleges, amongst other things, breach of contract and duty to inform,
deceit, misrepresentation and collusion, in connection with certain &#147;system access fees&#148; and
&#147;system licensing charges&#148; invoiced by wireless communications service providers to their
customers. The plaintiffs seek unspecified damages and punitive damages. The Saskatchewan action
sought certification of a national class encompassing all customers of wireless communications
service providers wherever resident in Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On July&nbsp;18, 2006, the Saskatchewan Court of Queen&#146;s Bench rendered its judgement on the motion for
certification, refusing to certify the action against all defendant Bell Canada companies except
Bell Mobility. With respect to Bell Mobility, the Court refused to certify the lawsuit on all
grounds except for the claim for unjust enrichment. However, the Court refused to grant
certification at this point on the basis that there was no appropriate representative plaintiff and
no proper plan for proceeding. The Court gave the plaintiff leave to return to the Court and has
scheduled April 4 and 5, 2007 for the re-hearing of the certification application.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Competition Bureau&#146;s investigation concerning system access fees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;9, 2004, Bell Canada was notified by the Competition Bureau that the Commissioner
of Competition had initiated an inquiry under the misleading advertising provisions of the
<I>Competition Act </I>concerning Bell Mobility&#146;s description or representation of system access fees
(SAFs) and was served with a court order, under section 11 of the <I>Competition Act, </I>compelling Bell
Mobility to produce certain records and other information that would be relevant to the Competition
Bureau&#146;s investigation. Bell Canada has complied with the court order and provided the requested
information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Mobility charges monthly SAFs to its cellular subscribers to help it recover certain costs
associated with its mobile communications network. These costs include maintenance costs, the cost
of installing new equipment and retrofitting new technologies, and fees for spectrum licences. These costs also
include the recovery of the contribution tax the CRTC charges to support telephone services in
rural and remote areas of Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Mobility may be subject to financial penalties by way of fines, administrative monetary
penalties and/or demands for restitution of a portion of the SAFs charged to cellular subscribers
if it is found to have contravened the misleading advertising provisions of the <I>Competition Act.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purported class action concerning Bell Mobility billing system</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On October&nbsp;28, 2004, a motion seeking certification to proceed as a class action against Bell
Mobility was filed with the Qu&#233;bec Superior Court. In December&nbsp;2006, identical motions were filed
in Ontario, Alberta and British Columbia. The lawsuits have not been certified to proceed as class
actions and it is too early to determine whether they will qualify for certification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The lawsuits were filed on behalf of any person who entered into a contract with Bell Mobility and
allege that such persons have unjustly incurred expenses as a result of billing errors made by Bell
Mobility following the change of its billing platform. In addition to the reimbursement of such
expenses, the class actions would, if certified, also seek payment in the amount of $100 per class
member for inconvenience as well as punitive damages in the amount of $200 per class member in
Qu&#233;bec, of general damages in the amount of $500&nbsp;million with no precise amount claimed as punitive
damages in Ontario, and of damages with no precise amount in Alberta and British Columbia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purported class action concerning Bell ExpressVu late payment charges</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;29, 2005, a statement of claim was filed under the <I>Class&nbsp;Proceedings Act, </I>1992
(Ontario) in the Ontario Superior Court of Justice against Bell ExpressVu by certain alleged
customers. The lawsuit has not been certified as a class action and it is too early to determine
whether it will qualify for certification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The statement of claim alleges that the interest and late payment fees charged by Bell ExpressVu to
customers whose accounts are in arrears are in excess of the effective annual rate of interest
permitted by certain provisions of the <I>Criminal Code (Canada). </I>The plaintiffs seek an order
requiring Bell ExpressVu to repay all interest and late payment fees paid to Bell ExpressVu by the
purported class of plaintiffs. In addition to the reimbursement of such amounts, the class action
would, if certified, also seek payment of punitive damages by Bell ExpressVu in the amount of $10
million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition to fighting the motion for certification, Bell ExpressVu has filed a companion motion
for summary judgment on the underlying substantive issue that Bell ExpressVu is not violating the
<I>Criminal Code. </I>The motion for certification is scheduled to be heard on April 1 and 2, 2007. The
summary judgment motion is scheduled to be heard on June&nbsp;5, 2007.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 37
</DIV>



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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Vid&#233;otron litigation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
August&nbsp;31, 2005, a statement of claim was filed in Qu&#233;bec Superior Court against Bell
ExpressVu by Vid&#233;otron It&#233;e., Vid&#233;otron
(R&#233;gional) lt&#233;e and CF Cable TV Inc. (a subsidiary of
Vid&#233;otron It&#233;e). In the statement of claim, the plaintiffs have alleged that Bell ExpressVu has
failed to adequately protect its system against signal piracy, thereby depriving the plaintiffs of
subscribers who, but for their alleged ability to pirate Bell ExpressVu&#146;s signal, would be
subscribing to plaintiff services. On November&nbsp;4, 2005, the plaintiffs amended their statement of
claim to increase the amount of damages claimed from $1&nbsp;million to approximately $49.5&nbsp;million for
profits allegedly lost over the last three years, $314.7&nbsp;million for alleged future losses and $10
million in punitive damages. Bell ExpressVu filed its defence in November&nbsp;2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Litigation concerning Bell Distribution Inc. (BDI)&nbsp;decision not to proceed with a
Wireless Income Fund transaction</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;28, 2006, a statement of claim was filed in the Qu&#233;bec Superior Court against BDI by
50 independent dealers that own 78 <I>Bell World&#153; </I>retail stores. The plaintiffs alleged that: BDI
agreed to proceed with a transaction pursuant to which the independent dealer retail stores and
BDI-owned retail stores would be sold to a Wireless Distribution Income Fund (WDIF)&nbsp;and that BDI
subsequently reneged on this agreement causing damages to the independent dealers; and
alternatively, that BDI&#146;s refusal to allow the independent dealers to proceed to sell their stores
and assign the dealer agreements to the WDIF constitutes an abuse of
right and is contrary to BDI&#146;s
obligations to act fairly and in accordance with reasonable commercial standards. The plaintiffs
seek damages against BDI in an amount of $135&nbsp;million. BDI filed its defence in late fall 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purported class action concerning Bell Canada and Bell Mobility late payment charges</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;27, 2006, a motion to obtain the authorization to institute a class action in Qu&#233;bec
was served against Bell Canada and Bell Mobility in the province of Qu&#233;bec, in the Qu&#233;bec City
District of the Superior Court. The lawsuit was filed on behalf of all persons in Canada that were
billed late payment charges by Bell Canada and Bell Mobility despite the fact that customers
allegedly paid amounts owing to Bell Canada and Bell Mobility to a financial institution, by
Internet, by telephone or by cheque within the payment period indicated on their bills, and/or that
suffered damages resulting from a payment allegedly made before the due date, and/or that were
allegedly billed, in the case of Qu&#233;bec residents, interest at a rate higher than the legal rate.
The lawsuit has not yet been authorized as a class action. The motion seeks an order requiring Bell
Canada and Bell Mobility to repay all late payment charges to the members of the class. In addition
to the reimbursement of such amounts, the class action would, if authorized, also seek payment of
damages and punitive damages by Bell Canada and Bell Mobility.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Lawsuits related to Teleglobe
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Teleglobe lending syndicate lawsuit</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On July&nbsp;12, 2002, a statement of claim was issued against BCE Inc. in the Ontario Superior
Court of Justice by ABN AMRO Bank N.V., Bank of Montreal, Bank of Tokyo-Mitsubishi (Canada),
Bayerische Landesbank Girozentrale, BNP Paribas (Canada), La Caisse Centrale Desjardins du Qu&#233;bec,
Canadian Imperial Bank of Commerce, Canadian Imperial Bank of Commerce, N.Y. Agency, Citibank,
N.A., Credit Suisse First Boston Canada, Credit Suisse First Boston, Export Development Canada,
HSBC Bank Canada, JPMorgan Chase Bank, Laurentian Bank of Canada, Merrill Lynch Capital (Canada)
Inc., Merrill Lynch Capital Corporation, National Bank of Canada,
Royal Bank of Canada, Soci&#233;t&#233;
G&#233;n&#233;rale, The Bank of Nova Scotia, and The Toronto-Dominion Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The plaintiffs sought damages of US$1.19&nbsp;billion, plus interest and costs, from BCE Inc. They
alleged that these damages are equal to the amount they advanced as members of the Teleglobe Inc.
and Teleglobe Holdings (U.S.) Corporation (together referred to in this section as Teleglobe)
lending syndicate. The plaintiffs represented approximately 95.2% of the US$1.25&nbsp;billion that the
members of that lending syndicate advanced.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The plaintiffs&#146; claim is based on several allegations, including that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the actions and representations of BCE Inc. and its management, in effect, amounted to a
legal commitment that BCE Inc. would repay the advances</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the court should disregard Teleglobe Inc. as a corporate entity and hold BCE Inc. responsible
to repay the advances as Teleglobe&#146;s alter ego.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;16, 2003, BCE Inc. filed its statement of defence relating to this action.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;2, 2004, two of the plaintiffs, Canadian Imperial Bank of Commerce and Canadian
Imperial Bank of Commerce, N.Y. Agency, which had advanced approximately US$104&nbsp;million to
Teleglobe, filed a notice of discontinuance with the Court and are therefore no longer plaintiffs
in this action.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;3, 2005, following the launch of the BNP Paribas (Canada) lawsuit described below, BNP
Paribas (Canada), which had advanced approximately US$50&nbsp;million to Teleglobe, filed a notice of
discontinuance with the Court and is therefore no longer a plaintiff in this action.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Following these discontinuances, the damages sought by the remaining plaintiffs would now amount to
approximately US$1.04&nbsp;billion, plus interest and costs, representing approximately 83% of the
US$1.25&nbsp;billion that the members of the lending syndicate advanced to Teleglobe.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;29, 2006, the plaintiffs filed an amended statement of claim in this lawsuit to add certain
allegations of material misrepresentations regarding Teleglobe&#146;s business plan.

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">38 |&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BNP Paribas (Canada) lawsuit</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;23, 2004, BNP Paribas (Canada), a former plaintiff in the Teleglobe lending
syndicate lawsuit action against BCE Inc., filed a statement of claim with the Ontario Superior
Court of Justice. The action is against BCE Inc. and five former directors of Teleglobe Inc. The
statement of claim was served on the defendants, subject to their right of challenging
jurisdiction, on April&nbsp;20, 2005. The statement of claim alleges:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>oppression against the former directors; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>breach of contract against BCE Inc.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BNP Paribas (Canada) seeks US$50&nbsp;million in damages. Teleglobe Inc. was at the relevant time a
subsidiary of BCE Inc. Pursuant to standard policies and subject to applicable law, the five former
directors of Teleglobe Inc. are entitled to seek indemnification from BCE Inc. in connection with
this lawsuit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;15, 2005, the defendants filed a motion challenging the Ontario Superior Court&#146;s
jurisdiction on the basis that Qu&#233;bec is the only convenient forum for adjudication of the
plaintiff&#146;s claims.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Court dismissed the motion on August&nbsp;16, 2006. An appeal has been filed by the defendants with
the Ontario Court of Appeal regarding that decision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Teleglobe unsecured creditors lawsuit</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A lawsuit was filed in the United States Bankruptcy Court for the District of Delaware (which
is now pending in the District Court for the District of Delaware) against BCE Inc. and ten
directors and officers of Teleglobe Inc. and certain of its subsidiaries on May&nbsp;26, 2004. The
plaintiffs are comprised of Teleglobe Communications Corporation, certain of its affiliated debtors
and debtors in possession, and the Official Committee of Unsecured Creditors of these debtors. The
lawsuit alleges:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>breach of an alleged funding commitment of BCE Inc. towards the debtors</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>misrepresentation by BCE Inc., and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>breach and aiding and abetting breaches of fiduciary duty by the defendants.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The plaintiffs seek an unspecified amount of damages against the defendants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In March&nbsp;2006, the plaintiffs filed an amended complaint to add specific factual allegations. Due
to an appeal by the defendants of a decision of the District Court on a preliminary matter, the
trial, which was originally scheduled to commence on June&nbsp;19, 2006, was postponed to a later date
to be determined upon the disposition of the appeal of the defendants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>VarTec lawsuit</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;2, 2002, VarTec Telecom, Inc. and VarTec Holding Company (together referred to in
this section as VarTec) filed a lawsuit against BCE Inc., BCE Ventures Inc. and the President of
BCE Ventures Inc. in the United States District Court for the Northern District of Texas (Dallas
division) now transferred to the United States District Court for the District of Columbia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The claim alleges fraud and violation of the anti-fraud provisions of the United States <I>Securities
Exchange Act </I>of 1934 relating to VarTec&#146;s purchase of Excelcom, Inc., Excel Telecommunications
(Canada) Inc. and Telco Communications Group, Inc. from a Teleglobe Inc. affiliate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Among other things, the complaint alleges that the defendants misrepresented Teleglobe Inc.&#146;s
financial status and its ability to assume certain liabilities related to the transaction. The
complaint claims that Teleglobe Inc.&#146;s liabilities to VarTec from the transaction could be more
than US$250&nbsp;million. It also seeks punitive damages, but does not state an amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2003, VarTec amended its complaint by removing a series of causes of action previously
included in the complaint, including breach of contract, and that the court should disregard
Teleglobe Inc. as a corporate entity and hold BCE Inc. responsible for its liabilities as Teleglobe
Inc.&#146;s alter ego.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;2, 2003, BCE Inc., BCE Ventures Inc. and the President of BCE Ventures Inc. filed a
motion:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to dismiss the action because of improper venue and on the merits for failure to state a
claim for which relief may be granted and/or failure to plead fraud claims with sufficient
particularity</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to strike VarTec&#146;s jury demand.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Kroll restructuring lawsuit</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;26, 2003, BCE Inc. was informed that Kroll Restructuring Ltd., in its capacity as
interim receiver of Teleglobe Inc., had filed a notice of action in the Ontario Superior Court of
Justice against five former directors of Teleglobe Inc. This lawsuit relates to Teleglobe Inc.&#146;s
redemption of its third series preferred shares in April&nbsp;2001 and the retraction of its fifth
series preferred shares in March&nbsp;2001.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The statement of claim was filed on March&nbsp;26, 2003 and was served to each of the directors in
August and September&nbsp;2003. On April&nbsp;16, 2004, the defendants filed their statement of defense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The plaintiff, now Kathy Morgan, in her capacity as Plan Administrator for Teleglobe Inc., is
seeking a declaration that the redemption and retraction were prohibited under the <I>Canada Business
Corporations Act </I>and that the five former directors should be held jointly and severally liable to
restore to Teleglobe Inc. all amounts paid or distributed on these transactions. These amounts
total approximately $661&nbsp;million, plus interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;26, 2007, the five former directors filed a third party claim in the Ontario Superior
Court of Justice against the former third series preferred shareholders of Teleglobe Inc. As
provided by the <I>Canada Business Corporations Act, </I>the third party claim seeks to recover from those
former third series preferred shareholders any amounts the former directors may have to restore to
Teleglobe Inc. as a result of this lawsuit, on account of the redemption of the third series
preferred shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While BCE Inc. is not a defendant in this lawsuit, Teleglobe Inc. was a subsidiary of BCE Inc. when
the redemption and retraction took place. Under standard policies and subject to applicable law,
the five former Teleglobe Inc. directors are entitled to seek indemnification from BCE Inc. in
connection with this lawsuit.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 39
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Teleglobe plan administrator lawsuit</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;16, 2005, Kathy Morgan, in her capacity as Plan Administrator for Teleglobe Inc.,
filed a lawsuit in the Ontario Superior Court of Justice against BCE Inc. and seven former
directors of Teleglobe Inc. The plaintiff is seeking a declaration that Teleglobe Inc. and its
creditors have been oppressed by the former directors of Teleglobe Inc. and by BCE Inc. within the
meaning of the <I>Canada Business Corporations Act. </I>The plaintiff is also seeking a declaration that
the former directors of Teleglobe Inc. breached their fiduciary duty to Teleglobe Inc. and failed
to act in accordance with the standard of care prescribed under the <I>Canada Business Corporations
Act.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The plaintiff is seeking compensation for oppression in the amount of $3&nbsp;billion and damages for
breach of fiduciary duty in the amount of $3&nbsp;billion, in each case plus interest and costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Teleglobe Inc. was a subsidiary of BCE Inc. when the acts or omissions alleged in the lawsuit would
have taken place. Under standard policies and subject to applicable laws, the seven former
directors are entitled to seek indemnification from BCE Inc. in connection with this lawsuit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">40 |&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="123"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>Assumptions and Risks </B>underlying our Forward-Looking Statements
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Assumptions made in the preparation of Forward-Looking Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Forward-looking statements for 2007 made in this AIF are based on a number of assumptions
that we believed were reasonable on the day we made the forward-looking statements. This section
outlines assumptions for 2007 that we made in addition to those set out in other sections of this
AIF. If our assumptions turn out to be inaccurate, our actual results could be materially different
from what we expect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Canadian economic assumptions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Canadian GDP growth &#151; essentially in line with GDP growth in 2006, consistent with
estimates set by the Conference Board of Canada</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Canadian business prime rate and Consumer Price Index (estimated by Statistics Canada) &#151; to
decline from their 2006&nbsp;year-end levels.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Canadian market assumptions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>revenue growth in the overall Canadian telecommunications market &#151; in line with the expected Canadian GDP growth</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>residential wireline voice services revenues &#151; to continue to decrease due to wireless
substitution, competition from cable companies and other factors such as e-mail and instant
messaging substitution</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>intense wireline competition in both the business and residential telecommunications markets &#151; to continue mainly from cable companies</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>growth in revenues for the Canadian wireless and video markets &#151;  similar to the rate of growth in 2006</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>growth in revenues for the Canadian Internet market &#151; slightly lower than the rate of growth
in 2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Operational and financial assumptions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Operational</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>growth in the number of our wireless, video and high-speed Internet subscribers as well as
higher ARPU for these services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the rate of losses in our residential NAS to stabilize compared to 2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Financial</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Financial assumptions applicable to BCE Inc. include the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the incurrence of restructuring costs related to employee reductions in certain areas of the
business and staff relocations to reduce the level of leased office space</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the increase in amortization expense as a result of capital spending that has been higher
than asset retirements over the past few years</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>BCE&#146;s effective tax rate to increase as the 2006 effective tax rate benefited from one-time
adjustments that are not applicable in 2007</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no significant escalation in cash taxes as we accelerate the use of Bell Canada&#146;s research
and development tax credits.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, financial assumptions applicable to Bell Canada (excluding Bell Aliant) include the
following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>total net benefit plans cost to decrease mainly as a result of improved returns on plan
assets and changes to benefit plans</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>funding of our total net benefit plans to decrease due to improved returns on plan assets
and contributions made in 2006</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>capital intensity targeted at levels similar to 2006</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>further productivity improvements related to internal process redesign and supply
transformation initiatives.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Assumptions about transactions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>BCE Inc. to repurchase up to 5% of its common shares under its previously announced
normal course issuer bid</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>BCE Inc. to close the previously announced sale of Telesat in mid-2007.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Risks that could affect our business and results
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section describes the principal risks that could affect our business and results, in
addition to those previously described under <I>The Competitive Environment we operate in </I>and <I>The
Regulatory Environment we operate in.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A risk is the possibility that an event might happen in the future that could have a negative
effect on our financial condition, results of operations or business. Part of managing our business
is to understand what these potential risks could be and to mitigate them where we can (see <I>Risk
management practices </I>below).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The actual effect of any event on our business and results could be materially different from what
we currently anticipate. In addition, this description of risks does not include all possible
risks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a result of BCE Inc.&#146;s strategy of concentrating on Bell Canada&#146;s communications business and
the recently completed and announced dispositions of BCE Inc.&#146;s non-core assets, BCE Inc.&#146;s
financial performance now depends on how well Bell Canada performs financially. Accordingly, the
risk factors described in this section mainly relate to the operations and businesses of Bell
Canada and its subsidiaries, joint ventures and associated companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Economic and market conditions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our business is affected by general economic conditions, consumer confidence and spending,
and the demand for, and prices of, our products and services. If there is a decline in economic
growth and in retail and commercial activity, there could be a lower demand for our products and
services. During these periods, customers may delay buying our products and services, or reduce
purchases or discontinue using them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Weak economic conditions could lower our profitability and reduce cash flows from operations. They
also could negatively affect the financial condition and creditworthiness of our customers, which
could increase uncertainty about our ability to collect receivables and potentially increase our
bad debt expenses.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 41
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Strategies and plans</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We continue to implement our strategy of delivering unrivalled integrated communications
services to our customers across Canada. Our strategic direction requires us to continue to
transform our cost structure and the way in which we serve customers in the context of the
competitive and regulatory environment described above. This means we will need to continue to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>respond by adapting to these changes and making any necessary shifts in employee skills. If
our management, processes or employees are not able to adapt to these changes, our business
and financial results could be materially and negatively affected</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>invest capital to implement our strategies and operating priorities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The actual amount of capital required and the returns from these investments could, however, differ
materially from our current expectations. In addition, we may not have access to capital on
attractive terms when we need it.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not achieving our business objectives could have a material and negative impact on our financial
performance and growth prospects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Transforming our cost structure and containing capital intensity</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our strategies and operating priorities along with mandated price reductions require us to
continue to transform our cost structure. Accordingly, we are continuing to implement several
productivity improvements and initiatives to reduce costs while containing our capital
expenditures. Our objectives for cost reduction/productivity improvements continue to be aggressive
and there is no assurance that we will be successful in reducing costs. There will be a material
and negative effect on our profitability if we do not successfully maintain the quality of our
service while managing our capital expenditures and implementing these cost reduction initiatives
and productivity improvements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Many productivity improvements and cost reduction initiatives require capital expenditures to
implement systems that automate or enhance our operations. There is no assurance that these
investments will be effective in delivering the planned productivity improvements and cost
reductions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Improved customer service is critical to increasing customer retention and ARPU. It may, however,
be difficult to improve customer service while significantly reducing costs. If we are unable to
achieve either or both of these objectives, it could have a material and negative effect on our
results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Anticipating technological change and investing in new technologies, products and
services</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We operate in markets that are affected by constant technological change, evolving industry
standards, changing client needs, frequent introductions of new products and services, and short
product life cycles. Investment in new technologies, products and services and the ability to
launch, on a timely basis, such technologies, products and services are critical to increasing the
number of our subscribers and achieving our financial performance targets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We may face additional risks as we develop new products, services and technologies, and update our
networks to stay competitive. Newer technologies, for example, may quickly become obsolete or may
need more capital than expected. Development could be delayed for reasons beyond our control.
Substantial investments usually need to be made before new technologies prove to be commercially
viable. There is also a significant risk that current regulation could be expanded to apply to
newer technologies. A regulatory change could delay our launch of new services and restrict our
ability to market these services if, for example, new pricing rules or marketing or bundling
restrictions are introduced, or existing ones are extended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are in the process of moving traffic on our core circuit-based infrastructure to IP technology.
As part of this move, we are in the process of discontinuing certain services that are based on
circuit-based infrastructure. This is a necessary component of improving capital and operating
efficiencies. In some cases, this could be delayed or prevented by customers or regulatory actions.
If we cannot discontinue these services as planned, we will not be able to achieve the efficiencies
as expected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There is no assurance that we will be successful in developing, implementing and marketing new
technologies, products, services or enhancements in a reasonable time, or that they will have a
market. New products or services that use new or evolving technologies could reduce demand for our
existing offerings or cause prices to fall.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Events affecting our networks</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Network failures could materially hurt our business, including our customer relationships and
our operating results. Our operations depend on how well we protect our networks, equipment,
applications and the information stored in our data centres against damage from fire, natural
disaster, power loss, hacking, computer viruses, disabling devices, acts of war or terrorism and
other events. Our operations also depend on timely replacement and maintenance of our networks and
equipment. Any of these events could cause our operations to be shut down indefinitely.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our networks are connected with the networks of other telecommunications carriers, and we rely on
them to deliver some of our services. Any of the events mentioned in the previous paragraph, as
well as strikes or other work disruptions, bankruptcies, technical difficulties or other events
affecting the networks of these other carriers, could also hurt our business, including our
customer relationships and our operating results. In addition, we have outsourced certain services
to providers that operate outside of Canada. Although we have redundancy and network monitoring
systems in place, a major natural disaster that affects the regions in which our service providers
operate, or other events adversely affecting the business or operations of such service providers,
could have a material negative effect on our service levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cisco Systems Inc. (Cisco) recently issued three security advisories that may impact certain of our
clients with Cisco routers running on the Internetwork Operating System. Bell Canada is working
closely with Cisco to mitigate potential effects of these vulnerabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">42 |&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Software and system upgrades</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Many aspects of our business, such as providing telecommunication services and customer
billing, among others, depend to a large extent on various IT systems and software, which must be
improved and upgraded regularly and replaced from time to time. Implementing system and software
upgrades and conversions is a complex process, which may have several adverse consequences
including billing errors and delays in customer service. Any of these events could significantly
damage our customer relationships and business and have a material and negative effect on our
results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Renegotiating labour agreements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Approximately 46% of our employees are represented by unions and are covered by collective
agreements. Renegotiating collective agreements could result in higher labour costs and work
disruptions, including work stoppages or work slowdowns. Difficulties in renegotiations or other
labour unrest could significantly hurt our business, operating results and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There can be no assurance that if a strike or other work disruption occurs, it would not adversely
affect service to our customers. In addition, work disruptions at our service providers, including
work slowdowns and work stoppages due to strikes, could significantly hurt our business, including
our customer relationships and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The collective agreements between the CEP and Expertech representing approximately 160 clerical and
1,300 craft and services employees have both expired on November&nbsp;30, 2006. The parties have been in
negotiations since November&nbsp;2006. A first offer by Expertech was rejected by both bargaining units&#146;
employees on December&nbsp;20, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;26, 2007, the craft and services employees rejected Expertech&#146;s final offer at 64.5%
whereas its clerical employees accepted the offer at 78.3%. Expertech&#146;s craft and services
employees will obtain their right to strike if and once the CEP gives 72-hours notice to Expertech
indicating the date after which a strike will occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a result of this vote, Expertech declared it was unable to restructure its operations and
announced the wind-down of its operations. Bell Canada announced that it would work with Expertech
toward an orderly and timely wind-down of its activities and would transfer its work to many local
suppliers in Qu&#233;bec and Ontario.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;5, 2007, the CEP and Expertech announced that an agreement had been reached on some
refinements to Expertech&#146;s final offer that, if accepted by union members, would allow Expertech to
avoid closure. This offer has been put to a vote by the craft and services employees. The results
will be announced on March&nbsp;19, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of the bargaining process, the CEP filed, in December&nbsp;2006, a
single employer and a sale of business application before the CIRB against
Bell Canada and Expertech. Hearings are scheduled in May and June&nbsp;2007. Should the CEP be successful with these applications,
Bell Canada could be bound by the collective agreements now covering
Expertech&#146;s employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">An arbitration decision was received by Expertech in December&nbsp;2006 under which it was ordered
to make the Bell Canada 2004 VER program available to all employees covered by the craft and
services collective agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For collective agreements that expire in 2007 see <I>About BCE &#151; Our employees.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Epidemics, pandemics and other health risks</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Epidemics (e.g. SARS) and pandemics, as well as other health risks, could occur and impact
our operations. Our operations depend on timely replacement and maintenance of our networks and
equipment (refer to <I>Events affecting our networks </I>above) and our ability to service our customers.
In certain aspects of our solution delivery we rely on third parties for services. Should an
influenza pandemic occur it is possible that we would be unable to maintain the network and service
our customers in a timely manner, resulting in an interruption or failure of certain of our normal
business functions or operations, which could have a material adverse effect on our results of
operations, liquidity or financial condition. We are taking appropriate prudent measures to
mitigate these risks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Health concerns about radio frequency emissions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">It has been suggested that some radio frequency emissions from cellphones may be linked to
certain medical conditions. Interest groups have also requested investigations into claims that
digital transmissions from handsets used with digital wireless technologies pose health concerns
and cause interference with hearing aids and other medical devices. This could lead to additional
government regulation, which could have a material and negative effect on our business. In
addition, actual or perceived health risks of wireless communications devices could result in fewer
new network subscribers, lower network usage per subscriber, higher churn rates, product liability
lawsuits or less outside financing being available to the wireless communications industry. Any of
these could have a material and negative effect on our wireless business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Potential legislation restricting in-vehicle use of cellphones</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some studies suggest that using cellphones while driving may result in more motor vehicle
collisions. It is possible that this could lead to new regulations or legislation banning the use
of handheld cellphones while driving, as it has in Newfoundland and Labrador and in several U.S.
states, or other restrictions on in-vehicle use of wireless devices. If any of these happen,
cellphone use in vehicles may decline, which may negatively affect our wireless business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Bell ExpressVu</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell ExpressVu currently uses four satellites, Nimiq 1, Nimiq 2, Nimiq 3 and Nimiq 4-Interim,
for its video services. An additional satellite has been leased and is expected to be brought into
service in the second quarter of 2007 to replace Nimiq 4-Interim which is close to the end of its
life. Telesat, a subsidiary of BCE Inc., operates or directs the operation of these satellites.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 43
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Satellites are subject to significant risks (refer to the section below entitled <I>Telesat </I>for more
details concerning such risks). Any loss, failure, manufacturing defects, damage or destruction of
these satellites, of Bell ExpressVu&#146;s terrestrial broadcasting infrastructure, or of Telesat&#146;s
tracking, telemetry and control facilities to operate the satellites, could have a material and
negative effect on Bell ExpressVu&#146;s results of operations and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell ExpressVu will require additional satellite capacity to meet the bandwidth requirements for
additional HD channels in the future. Bell ExpressVu has supported Telesat&#146;s application to
Industry Canada for additional satellite spectrum licences to facilitate the additional satellite
capacity. If Telesat is unsuccessful in obtaining such additional spectrum licences, Bell ExpressVu
may not have access to the necessary satellite capacity to launch the number of HD channels
contemplated by its business plan, which could have a material and negative effect on Bell
ExpressVu&#146;s business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell ExpressVu faces a loss of revenue resulting from the theft of its services. Bell ExpressVu
introduced a smart card swap for its authorized digital receivers that is designed to block
unauthorized reception of Bell ExpressVu&#146;s signals. The smart card swap was introduced in phases and
was completed in July of 2005. As with any technology-based security system, it is not possible to
eliminate with absolute certainty a compromise of that security system. As is the case for all
other pay television providers, Bell ExpressVu has experienced, and continues to experience,
ongoing efforts to steal its services by way of compromise of Bell ExpressVu&#146;s signal security
systems.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
October&nbsp;28, 2004, the Court of Qu&#233;bec ruled in <I>R. v.
D&#146;Argy and Theriault (D&#146;Argy Case)</I> that the
provisions in the <I>Radiocommunication Act </I>making it a criminal offence to manufacture, offer for
sale or sell any device used to decode an encrypted subscription signal relating to the
unauthorized reception of satellite signals violate the freedom of expression rights enshrined in
the <I>Charter. </I>This decision has been overruled by the Qu&#233;bec Superior Court and the Qu&#233;bec Court of
Appeal has upheld the Superior Court&#146;s decision. The defendants are now seeking leave to appeal to
the Supreme Court of Canada. Should leave to appeal be granted and should the ruling of the Qu&#233;bec
Court of Appeal be overruled by the Supreme Court of Canada and Parliament does not enact new
provisions criminalizing the unauthorized reception of satellite
signals, Bell ExpressVu could
face increasing loss of revenue from the unauthorized reception of satellite signals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liquidity</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to meet our financial obligations and provide for planned growth depends on our
sources of liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our cash requirements may be affected by the risks associated with our contingencies, off-balance
sheet arrangements, derivative instruments and assumptions built into our business plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In general, we finance our capital needs in four ways:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>from cash generated by our operations or investments</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by borrowing from commercial banks</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through debt and equity offerings in the capital markets</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by selling or otherwise disposing of assets (including accounts receivable).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Financing through equity offerings would dilute the holdings of existing equity investors. An
increased level of debt financing could lower our credit ratings, increase our borrowing costs and
give us less flexibility to take advantage of business opportunities or meet our financial
obligations. Business acquisitions could also lower our credit ratings and have similar adverse
consequences.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to raise financing depends on our ability to access the capital markets and the
syndicated commercial loan market. The cost and amount of funding depend largely on market
conditions, and the outlook for our business and credit ratings at the time capital is raised. If
our credit ratings are downgraded, our cost of funding could significantly increase and the amount
of funding available could be reduced. In addition, participants in the capital and syndicated
commercial loan markets have internal policies limiting their ability to invest in, or extend
credit to, any single borrower or group of borrowers or to a particular industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. and some of its subsidiaries have entered into credit facilities with various financial
institutions. They include credit facilities supporting commercial paper programs. There is no
assurance that these facilities will be renewed on favourable terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We need significant amounts of cash to implement our business plan. This includes cash for capital
expenditures to provide our services, payment of our contractual obligations, including repayment
of our outstanding debt, payment of dividends to shareholders and share buy-backs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our plan in 2007 is to generate enough cash from our operating activities which, together with cash
on hand, is expected to pay for capital expenditures, dividends and share buy-backs. We expect to
pay contractual obligations maturing in 2007 from cash on hand, from cash generated from our
operations, by issuing debt and by selling non-core assets. If actual results are different from
our business plan or if the assumptions in our business plan change, we may have to raise more
funds than expected by issuing debt or equity, borrowing from banks or selling or otherwise
disposing of other assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If we cannot raise the capital we need upon acceptable terms, we may have to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limit our ongoing capital expenditures</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limit our investment in new businesses</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limit the size of our share buy-back program</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>try to raise additional capital by selling or otherwise disposing of assets.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any of these could have a material and negative effect on our cash flow from operations and on our
growth prospects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;18, 2006, BCE Inc. announced the sale of its satellite services subsidiary Telesat. BCE
Inc.&#146;s 2007 financial plan assumes completion of the above-mentioned sale of Telesat. However, this
transaction will take several months to complete and remains subject to a number of approvals and
closing conditions, including approval
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">44 |&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">by Industry Canada and the United States Federal Communications Commission and other closing
conditions that are customary in a transaction of this nature, including the absence of a material
adverse change affecting Telesat&#146;s business and the ability of the purchaser to draw on its
committed financing to raise the proceeds needed to pay BCE Inc. BCE Inc.&#146;s inability to complete
the proposed transaction would have an adverse effect on its liquidity and 2007 financial plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Litigation, regulatory matters and changes in laws</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Regulatory initiatives or proceedings and pending or future litigation, including the
increase in class action claims, could have a material and negative effect on our businesses,
operating results and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Changes in laws or regulations or in how they are interpreted, and the adoption of new laws or
regulations, could also materially and negatively affect us. These include changes in tax laws or
the adoption of new tax laws that result in higher tax rates or new taxes. They also include recent
amendments to the securities laws of certain provinces of Canada which introduced statutory civil
liability for misrepresentations in continuous disclosure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For a description of certain regulatory initiatives and proceedings affecting us, please see <I>The
Regulatory Environment we operate in.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Pension fund contributions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The funding status of our pension plans resulting from future valuations of our pension plan
assets and liabilities depends on a number of factors, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actual returns on pension plan assets</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>long-term interest rates</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#167;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in pension regulations.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These factors could require us to increase contributions to our defined benefit pension plans in
the future and therefore could have a material and negative effect on our liquidity and results
of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BCE Inc.&#146;s sources of income and assets</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. has no material sources of income or assets of its own, other than the interests
that it has in its subsidiaries, joint ventures and significantly influenced companies, including
its ownership of all of the outstanding common shares of Bell Canada. BCE Inc.&#146;s cash flow and,
consequently, its ability to service its indebtedness and to pay dividends on its equity securities
are therefore dependent upon the ability of its subsidiaries, joint ventures and significantly
influenced companies to pay dividends or otherwise make distributions to it. As a result of BCE
Inc.&#146;s strategy of focusing on its communications business, the business of Bell Canada now
represents, and is expected in the future to continue to represent, substantially all of BCE Inc.&#146;s
business and investment activity. Therefore BCE Inc.&#146;s financial performance is, and is expected to
continue to be, dependent on the operations and financial performance of Bell Canada. BCE Inc.&#146;s
subsidiaries, joint ventures and significantly influenced companies are separate and distinct legal
entities and have no obligation, contingent or otherwise, to pay any dividends or make any other
distributions to BCE Inc. In addition, any right of BCE Inc.
to receive assets of its subsidiaries, joint ventures and significantly influenced companies
upon their liquidation or reorganization will be structurally subordinated to the prior claims
of creditors of such subsidiaries, joint ventures and significantly influenced companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Dividend Policy</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;12, 2006, BCE Inc. announced the establishment of a dividend policy based on a
target dividend payout percentage range of earnings per share before net gains (losses)&nbsp;on
investments and restructuring costs. However, based on the prevailing competitive and technological
environment at any given time, there can be no guarantee that BCE Inc.&#146;s dividend policy will be
maintained. Refer to the sections above entitled <I>Anticipating technological change and investing in
new technologies, products and services </I>and <I>Liquidity </I>and in the section <I>The Competitive
Environment we operate in </I>for more information on these risks and their potential impact on our
businesses, revenues, cash flows and capital expenditures which in turn could adversely affect BCE
Inc.&#146;s ability to maintain its dividend policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Bell Aliant cash distributions and tax treatment of income trusts</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although Bell Aliant intends to make cash distributions to its unitholders, including BCE,
there can be no guarantee regarding the amounts of these cash distributions, which may fluctuate
with Bell Aliant&#146;s performance. Bell Aliant also has the discretion to establish cash reserves for
the proper conduct of its business which would reduce the amount of cash otherwise available for
distributions in that year. Accordingly, there can be no assurance regarding the actual levels of
distributions by Bell Aliant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
October&nbsp;31, 2006, the federal government announced significant changes to the tax treatment of
income trusts. Effective in 2011, income trusts that were publicly traded before November&nbsp;2006,
like Bell Aliant, will be subject to taxation at corporate tax rates and certain distributions to
unitholders will be taxed like dividends received from a corporation. All else being equal, the
taxation of income trusts at corporate tax rates may result in less cash being available to pay
distributions by Bell Aliant. The federal government specified at that time that while there was no
intention to prevent existing income trusts from normal growth during the transitional period, any
undue expansion of an existing income trust before 2011 would make the new rules effective
immediately.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;15, 2006, the federal government issued a release clarifying what would be considered
undue expansion. In that release, the Government stated that it would not recommend any change to
the 2011 effective date in respect of any existing income trust whose equity capital grew as a
result of issuances of new equity in any of the intervening periods by an amount that did not
exceed the greater of $50&nbsp;million and a safe harbour amount. The safe harbour amount is to be
measured by reference to an income trust&#146;s market capitalization as of the end of trading on
October&nbsp;31, 2006. Market capitalization is to be measured in terms of the value of an income
trust&#146;s issued and outstanding publicly traded units. For this purpose, it would not include debt
(whether or not that debt carried a conversion right or was itself publicly traded), options or
other interests that were convertible into units of the income trust. For the period from November
1, 2006 to the end of 2007, an income
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 45
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">trust&#146;s
safe harbour will be 40% of that October&nbsp;31, 2006 benchmark. An income trust&#146;s safe harbour
for each of the 2008 through 2010 calendar years will be 20% of that benchmark, allowing cumulative
growth of up to 100% over the four-year transition period. The release also indicated that the
merger of two or more income trusts, each of which was publicly traded on October&nbsp;31, 2006, or a
reorganization of such an income trust, would not be considered growth to the extent that there was
no net addition to equity as a result of the merger or reorganization. Based on the release, the
privatization of Bell Nordiq and the proposed acquisition of Amtelecom Income Fund should not
represent &#145;undue expansion&#146;. The release also indicated that conversions of income trusts back to
corporations would be allowed to take place without any tax consequences to investors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on the federal government announcements to date, it is anticipated that distributions will be
impacted by taxation in 2011 or earlier if it is determined that Bell Aliant has experienced undue
expansion prior to 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">However, the exact legislation that will implement the release has not been made public so there is
uncertainty as to the reach and application of this announcement. It is therefore possible that the
anticipated new tax measures for existing income trusts may be different from what was announced
and which could result in, amongst other things, the earlier application of these measures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Stock market volatility</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Differences between BCE Inc.&#146;s actual or anticipated financial results and the published
expectations of financial analysts may contribute to volatility in BCE Inc.&#146;s securities. A major
decline in the capital markets in general, or an adjustment in the market price or trading volumes
of BCE Inc.&#146;s securities, may materially and negatively affect our ability to raise capital, issue
debt, make strategic acquisitions or enter into joint ventures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Acquisitions and dispositions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our business plans include making strategic acquisitions and entering into joint ventures. We
also from time to time dispose of assets or all or part of certain businesses. There is no
assurance that we will find suitable companies to acquire or partner with, or that we will have the
financial resources needed to complete any acquisition or enter into any joint venture. There could
also be difficulties in integrating the operations of acquired companies with our existing
operations or in operating joint ventures. There is also no assurance that we will be able to
complete any announced dispositions or that we will use the funds received as a result of such
dispositions for any specific purpose that may be publicly anticipated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Acquisitions
and dispositions may be subject to various conditions, such as approvals by regulators
and holders of our securities and other closing conditions, and there can be no assurance that,
with respect to any specific acquisition or disposition, all such conditions will be satisfied.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Telesat</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Satellite industry risks</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Satellites utilize highly complex technology and operate in the harsh environment of space
and therefore are subject to significant operational risks while in orbit. The risks include
in-orbit equipment failures, malfunctions and other kinds of problems commonly referred to as
anomalies that could reduce the satellites&#146; commercial lives. Acts of war or terrorism, magnetic,
electrostatic or solar storms, and space debris or micrometeoroids could also damage Telesat&#146;s
satellites.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any single anomaly or series of anomalies or other failure (whether full or partial) of one of
Telesat&#146;s satellites could cause its revenues, cash flows and backlog to decline materially, could
require Telesat to repay prepayments made by customers of the affected satellite and could
materially and adversely affect its relationships with current customers and its ability to attract
new customers for satellite services. A failure could result in a customer terminating its contract
for service on the affected satellite.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Launch failures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Satellites are subject to certain risks related to failed launches. Launch vehicles may fail
resulting in significant delays in the deployment of satellites because of the need to construct
replacement satellites, which typically takes up to 30&nbsp;months or longer, and to obtain another
launch vehicle. Such significant delays could materially and adversely affect operations, revenues,
cash flows and backlog.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Construction and launch delays</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The launch of satellites is subject to certain delays. Launch delays can result from delays
in the construction of satellites and launch vehicles, the periodic unavailability of reliable
launch opportunities, possible delays in obtaining regulatory approvals and launch failures. If
satellite construction schedules are not met, a launch opportunity may not be available at the time
the satellite is ready to be launched. Delays in the commencement of service could enable customers
who have contracted for transponder capacity to terminate their contracts, could affect plans to
replace an in-orbit satellite prior to the end of its useful life, could result in the expiration
or cancellation of launch insurance and could result in the loss of orbital rights. The failure to
implement a satellite deployment plan on schedule could have a material adverse effect on Telesat&#146;s
financial condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Market for satellite insurance</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Telesat&#146;s current satellite insurance does not protect it against all satellite-related
losses that it may experience, and it does not have in-orbit insurance coverage for all of the
satellites in its fleet. The insurance will not protect Telesat against business interruption, lost
revenues or delay of revenues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the extent Telesat experiences a launch or in-orbit failure that is not fully insured, or for
which insurance proceeds are delayed or disputed, it may not have sufficient resources to
replace the affected satellite.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">46 |&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc.&nbsp;&nbsp;2006 Annual Information Form
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Risk management practices
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s audit committee (Audit Committee) is responsible for the oversight of our risk
management processes. Such processes are designed to manage, rather than eliminate, the risk of
failure to achieve our business objectives. The Audit Committee also takes into account significant
social, environmental and ethical matters that relate to our business and reviews annually our
corporate social responsibility program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have enterprise-wide risk assessment processes which incorporate the internal control and
enterprise risk management frameworks of the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Risk assessment and evaluation is an important part of the annual business
planning cycle. In developing their annual plans, BCE&#146;s business units identify and assess
significant risks to the achievement of their business objectives and where necessary develop
mitigation plans. The risk information generated is reviewed with senior management and BCE Inc.&#146;s
board of directors in evaluating the business plans for each of the business units and the company
as a whole. The Internal Audit group plans its annual activities employing a risk-based review of
internal control processes in the company. Throughout the year the Internal Audit group carries out
continuing assessments of the quality of controls. On a quarterly basis the Internal Audit group
reports to the Audit Committee on the status of adherence to our internal control policies and on
areas identified for specific improvement. The Internal Audit group also promotes effective risk
management in our lines of business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee considers the effectiveness of the operation of our internal control
procedures, reviewing reports from the Internal Audit group and BCE Inc.&#146;s external auditors. The
Audit Committee reports its conclusions to BCE Inc.&#146;s board of directors.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&nbsp;&nbsp;2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 47
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="124"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Management&#146;s <B>Discussion and Analysis</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The information that appears on pages 2 to 61 of the Bell Canada Enterprises 2006
Annual Report under <I>Management&#146;s Discussion and Analysis </I>is incorporated herein by
reference. Our annual report is available on SEDAR at www.sedar.com, on EDGAR
at www.sec.gov and on BCE Inc.&#146;s website at www.bce.ca.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">48 &#124;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="125"></A>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">For more <B>Information</B>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Documents you can request
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You can ask us for a copy of any of the following documents:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>this AIF, together
with any document, or
the relevant
pages of any
document, incorporated by reference into
it</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>BCE Inc.&#146;s most
recent Business
Update and
annual report,
which includes the comparative
financial statements and management&#146;s
discussion and analysis for the most
recently completed financial year
together with the accompanying auditors&#146;
report</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any interim
financial statements
that were
filed after
the financial statements for
the most recently completed financial
year</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the most recent
BCE Inc.
notice of
annual meeting
and management proxy
circular, which contains more information
about directors&#146; and officers&#146;
remuneration and indebtedness, principal
holders of BCE Inc.&#146;s securities, options
to purchase securities and interests of
insiders in material transactions, where
applicable</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other
documents that
are incorporated
by reference
into a preliminary
short form prospectus or a short form
prospectus and are not listed above.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please send your request to the Corporate Secretary of BCE Inc., at 1000, rue de La Gaucheti&#232;re
Ouest, Suite&nbsp;3700, Montr&#233;al, Qu&#233;bec <BR>H3B 4Y7.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will send you the documents at no charge when our securities are being distributed under a
preliminary short form prospectus or short form prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At any other time, we may charge you a reasonable fee if you or the company you work for is not
a security holder of BCE Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You can also ask us for a copy of the annual and quarterly management&#146;s discussion and analysis of
BCE Inc. by contacting the Senior Vice-President &#151; Finance and Investor Relations of BCE Inc., at
1000, rue de La Gaucheti&#232;re Ouest, Suite&nbsp;3700, Montr&#233;al, Qu&#233;bec H3B 4Y7 or by sending an e-mail to
investor.relations@bce.ca.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Other information about BCE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The transfer agent and registrar for the common shares and preferred shares of BCE Inc. in
Canada is Computershare Trust Company of Canada (Computershare) at its principal offices in
Montr&#233;al and Toronto and in the United States is Computershare Trust Company, Inc. at its principal
offices in Denver and New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The registrar for BC E Inc.&#146;s debt securities is Computershare, in Montr&#233;al, and debt securities
may be presented for registration or transfer, at the principal office of Computershare in the
cities of Halifax, Montr&#233;al, Toronto, Calgary or Vancouver.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The register for Bell Canada&#146;s debentures is kept at the principal office of CIBC Mellon Trust
Company (CIBC Mellon), in Montr&#233;al, and facilities for registration, exchange and transfer of the
debentures are maintained at the principal offices of CIBC Mellon in Halifax, Montr&#233;al, Toronto,
Winnipeg, Calgary and Vancouver.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The transfer agent and registrar for Bell Canada&#146;s U.S. debentures is U.S. Bank Trust National
Association at its office in New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The register for Bell Canada&#146;s subordinated debentures is kept at the principal office of
Computershare, in Montr&#233;al, and facilities for registration, exchange and transfer of the
subordinated debentures are maintained at the principal offices of Computershare in Halifax,
Montr&#233;al, Toronto, Calgary and Vancouver.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additional
information, including directors&#146; and officers&#146; compensation, personal loans to directors
and officers, principal holders of BCE Inc.&#146;s securities and securities authorized for issuance
under equity compensation plans, if applicable, is contained in BCE Inc.&#146;s management proxy
circular for its most recent annual meeting of shareholders that involved the election of
directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These documents, as well as BCE Inc.&#146;s annual and quarterly reports and news releases, are also
available on BCE Inc.&#146;s website at www.bce.ca.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additional information relating to BCE is available on SEDAR at www.sedar.com and on EDGAR
at www.sec.gov. Additional financial information is provided in BCE Inc.&#146;s financial
statements and management&#146;s discussion and analysis for 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="71%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">Shareholder inquiries
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1-800-561-0934</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Investor relations
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1-800-339-6353</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.
2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#124; 49

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="126"></A>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Schedule 1 &#151; <B>Audit Committee Information</B>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">1. The audit committee&#146;s charter
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The BCE Inc. Audit Committee charter is available in the governance section of BCE Inc.&#146;s
website at www.bce.ca and attached as Schedule&nbsp;1A to this AIF.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">2. Composition of the audit committee
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">NAME</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">INDEPENDENT?</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">FINANCIALLY LITERATE?</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">T.C. O&#146;Neill &#151; Chair
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">A. B&#233;rard
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">A.S. Fell
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">J. Maxwell
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">V.L. Young
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Yes</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-bottom: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">3. Relevant education and experience
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>T.C. O&#146;Neill &#151; Chair</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;O&#146;Neill has been a director on the BCE Inc. board since January&nbsp;2003. He is also Chair of
the Audit Committee. He was Chairman and Chief Executive Officer of Price Waterhouse Canada from
1996 to 1998. He was Chief Executive Officer of PricewaterhouseCoopers LLP in Canada from 1998 to
2001 and was Chief Operating Officer of PricewaterhouseCoopers LLP Global Organization from 2000
until January&nbsp;2002. He also served as Chief Executive Officer of PricewaterhouseCoopers Consulting
from January&nbsp;2002 to May&nbsp;2002 and then as Chairman of the Board until October&nbsp;2002. A graduate of
Queen&#146;s University, Mr.&nbsp;O&#146;Neill received his CA designation in 1970 and was awarded the FCA
designation in 1988.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>A. B&#233;rard</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;B&#233;rard has been a director on the BCE Inc. board since January&nbsp;2003. He previously served
as Chief Executive Officer of the National Bank of Canada from September&nbsp;1990 to March&nbsp;2002. He
also served as Chairman of the Board at the National Bank of Canada from September&nbsp;1990 to March
2004. Mr.&nbsp;B&#233;rard holds a Fellow&#146;s Diploma from the Institute of Canadian Bankers and was Chairman
of the Executive Council of the Canadian Bankers&#146; Association from 1986 to 1988.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>A.S. Fell</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Fell has been a director on the BCE Inc. board since January&nbsp;2002. He is Chairman of the
board, RBC Dominion Securities Limited since December&nbsp;1999. Mr.&nbsp;Fell was previously the Chairman
of the board and Chief Executive Officer of RBC Dominion Securities Limited from 1992 to December
1999. He is also a director and Chair of the board of Munich Reinsurance Company of Canada. He
was also, until June&nbsp;2005, Chairman of the University Health Network Trustees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>J. Maxwell</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Maxwell has been a director on the BCE Inc. board since January&nbsp;2000. She is currently a
research fellow of the Canadian Policy Research Networks Inc. since January&nbsp;2006 and served as
President from 1995 until January&nbsp;2006. Prior to this appointment, she was Associate Director of
the School of Political Studies at Queen&#146;s University. She acted as Chair of the Economic Council of Canada from 1985 to 1992. Prior to 1985, Ms.&nbsp;Maxwell worked as
a consultant and as Director of Policy Studies at the C.D. Howe Institute.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>V.L. Young</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Young has been a director on the BCE Inc. board since May&nbsp;1995. He was Chairman and Chief
Executive Officer of Fishery Products International Limited from 1984 until May&nbsp;2001, earning the
distinction of CEO of the Year from the Financial Times in 1994. He also served as Deputy Minister
of the Treasury Board and special advisor to the Premier of Newfoundland and Labrador, as well as
CEO of Newfoundland Hydro. Mr.&nbsp;Young holds an MBA from the University of Western Ontario.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">4. Reliance on certain exemptions
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Nil
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">5. Reliance on the exemption in subsection 3.3(2) or section 3.6
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Nil

</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt">6. Reliance on section 3.8
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Nil
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">7. Audit committee oversight
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Nil
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">8. Pre-approval policies and procedures
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s Auditors Independence Policy is a comprehensive policy governing all aspects of
BCE&#146;s relationship with the external auditors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD> establishing a process for determining whether various audit and other services provided by
the external auditors affect its independence</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD> identifying the services that the external auditors may and may not provide to BCE Inc. and
its subsidiaries</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD> pre-approving all services to be provided by the external auditors of BCE Inc. and its
subsidiaries, and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><font face="wingdings"><B>&#167;</B></font></TD>
    <TD width="1%">&nbsp;</TD>
    <TD> establishing a process outlining procedures when hiring current or former personnel of the
external auditors in a financial oversight role to ensure auditors&#146; independence is
maintained.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Auditors Independence Policy is available in the governance section of BCE Inc.&#146;s website at
www.bce.ca.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">50 &#124;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 6pt">9. External auditors&#146; service fees (by category)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below shows the fees that Deloitte &#038; Touche LLP billed to BCE Inc. and its
subsidiaries for various services for each year in the past two fiscal years. Fees for audit
services increased in 2006 due primarily to additional audit work on internal control over
financial reporting (ICFR)&nbsp;as a result of the requirements of the Sarbanes-Oxley Act.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(IN $ MILLIONS)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>13.6</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-related fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>5.2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0.9</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>19.7</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">13.1</TD>
    <TD nowrap>*</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 0pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Restated to exclude fees billed to BCE Inc. for work related to CTVglobemedia Inc. (formerly
Bell Globemedia Inc.).</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Audit fees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These fees include professional services provided by the external auditor for the review of the
interim financial statements, statutory audits of the annual financial statements, the audit of the
effectiveness of ICFR, the review of prospectuses, the review of financial accounting and reporting
matters, other regulatory audits and filings and translation services.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Audit-related fees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These fees relate to non-statutory audits, Sarbanes-Oxley Act initiatives, due diligence,
pension plan audits and the review of financial accounting and reporting matters.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Tax fees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These fees include professional services for tax compliance, tax advice and assistance with tax
audits and appeals. Prior to October&nbsp;2005, these fees included fees for services with respect to
compliance with our conflict of interest policy for senior management, which services are no longer
provided by the external auditors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Other fees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These fees include any other fees for permitted services not included in any of the
above-stated categories. No such service were provided in the last two fiscal years.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | 51
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="127"></A>
</DIV>



<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Schedule 1A &#151; <B>Audit Committee Charter</B>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">I. Purpose
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The purpose of the Audit Committee is to assist the Board of Directors in its oversight of:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A. the integrity of the Corporation&#146;s
financial statements and related information;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">B. the Corporation&#146;s compliance with applicable
legal and regulatory requirements;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">C. the independence, qualifications and appointment
of the shareholders&#146; auditors;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">D. the performance of the Corporation&#146;s
shareholders&#146;auditors and internal audit; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">E. management responsibility for reporting on
internal controls and risk management.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">II. Duties and responsibilities
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee shall perform the functions customarily performed by audit committees and
any other functions assigned by the Board of Directors. In particular, the Audit Committee shall
have the following duties and responsibilities:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>A. Financial reporting and control</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. On a periodic basis, review and discuss with management and the shareholders&#146; auditors
the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>major issues regarding accounting principles and financial
statement presentation, including any significant changes in the
Corporation&#146;s selection or application of accounting principles,
and major issues as to the adequacy of the Corporation&#146;s internal
controls and any special audit steps adopted in light of material
control deficiencies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>analyses prepared by management and/or the shareholders&#146; auditors
setting forth significant financial reporting issues and judgments
made in connection with the preparation of the financial statements, including analyses of the effects of alternative generally
accepted accounting principles methods on the financial statements when such alternatives have been selected in the current
reporting period;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on the financial statements of
the Corporation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the type and presentation of information to be included in earnings
press releases (including any use of pro-forma or adjusted non-
generally accepted accounting principles, information).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Meet to review and discuss with management and the shareholders&#146;
auditor, report and, where appropriate, provide recommendations to the
Board of Directors on the following prior to its public disclosure:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the annual and interim consolidated financial statements, the
Corporation&#146;s disclosure under &#147;Management Discussion and
Analysis&#148;, Annual Information Form, earnings press releases,
financial information and earnings guidance provided to analysts and rating agencies and the
integrity of the financial reporting of the Corporation;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#151;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In addition to the role of the Audit Committee to make recommendations to the Board of
Directors, where the members of the Audit Committee consider that it is appropriate and in
the best interest of the Corporation, the interim consolidated financial statements, the
interim Corporation&#146;s disclosure under &#147;Management Discussion and Analysis&#148; for interim
period and interim earnings press releases and earnings guidance, may also be approved on
behalf of the Board of Directors by the Audit Committee, provided that such approval is
subsequently reported to the Board of Directors at its next meeting;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any audit problems or difficulties and management&#146;s response
thereto, including any restrictions on the scope of the activities of
the shareholders&#146; auditors or access to requested information and
any significant disagreements with management.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">3. Review and discuss reports from the shareholders&#146; auditors on:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all critical accounting policies and practices used by
the Corporation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all material alternative treatments of financial information within
generally accepted accounting principles that have been discussed
with management, including the ramifications of the use of such
alternate treatments and disclosures and the treatment preferred by
the shareholders&#146; auditors; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other material written communications between the share holders&#146;
auditors and management, and discuss such report with the
shareholders&#146; auditors.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>B. Oversight of the shareholders&#146; auditors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. Be directly responsible for the appointment, compensation, retention and oversight of the
work of the shareholders&#146; auditors and any other auditors preparing or issuing an audit report or
performing other audit services or attest services for the Corporation or any consolidated
subsidiary of the Corporation, where required and review, report and where appropriate, provide
recommendations to the Board of Directors on the appointment, terms and review of engagement,
removal, independence and proposed fees of the shareholders&#146; auditors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">52 &#124;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE
Inc.
2006 Annual Information Form
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Approve in advance all audit, review or attest engagement fees and terms for all audit,
review or attest services to be provided by the shareholders&#146; auditors to the Corporation and any
consolidated subsidiary and any other auditors preparing or issuing an audit report or performing
other audit services or attest services for the Corporation or any consolidated subsidiary of the
Corporation, where required.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. Pre-approve all engagements for permitted non-audit services provided by the shareholders&#146;
auditors to the Corporation and any consolidated subsidiary and to this effect may establish
policies and procedures for the engagement of the shareholders&#146; auditors to provide to the
Corporation and any consolidated subsidiary permitted non-audit services, which shall include
approval in advance by the Audit Committee of all audit/review and permitted non-audit services to
be provided by the shareholders&#146; auditors to the Corporation and any consolidated subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. Delegate, if deemed appropriate, authority to one or more members of the Audit Committee to
grant pre-approvals of audit/review/attest and permitted non-audit services, provided that any such
approvals shall be presented to the Audit Committee at its next scheduled meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. Establish policies for the hiring of partners, employees and former partners and employees
of the shareholders&#146; auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">6. At least annually, consider, assess, and report to the Board of Directors on:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the independence of the shareholders&#146; auditors, including whether
the shareholders&#146; auditors&#146; performance of permitted non-audit
services is compatible with the shareholders&#146; auditors&#146; independence;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>obtaining from the shareholders&#146; auditors a written statement
(i)&nbsp;delineating all relationships between the shareholders&#146; auditors and the Corporation; (ii)
assuring that lead audit partner rotation is carried out, as required by law; and (iii)
delineating any other relationships that may adversely affect the independence of the
shareholders&#146; auditors; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the evaluation of the lead audit partner, taking into account the
opinions of management and internal audit.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">7. At least annually, obtain and review a report by the shareholders&#146; auditors describing:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the shareholders&#146; auditors&#146; internal quality-control procedures;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any material issues raised by the most recent internal
quality-control review, or peer review of the shareholders&#146; auditors firm,
or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the shareholders&#146; auditors firm,
and any steps taken to deal with any such issues.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">8. Resolve any disagreement between management and the shareholders&#146; auditors regarding financial
reporting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">9. Review audit plan with the shareholders&#146; auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">10. Meet periodically with the shareholders&#146; auditors in the absence of
management and internal audit.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>C. Oversight of internal audit</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. Review and discuss with the head of internal audit, report and, where
appropriate, provide recommendations to the Board of Directors on
the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the appointment and mandate of internal audit, including
the responsibilities, budget and staffing of the Corporation&#146;s
internal audit;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>discuss with the head of internal audit the scope and performance
of the internal audit, including a review of the annual internal
audit plan, and whether there are any restrictions or limitations on
internal audit;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>obtain periodic reports from the head of internal audit regarding
internal audit findings, including the Corporation&#146;s internal
controls, and the Corporation&#146;s progress in remedying any material
control deficiencies.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Meet periodically with the head of internal audit in the absence of
management and the shareholders&#146; auditors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>D. Oversight of the Corporation&#146;s internal control system</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. Review and discuss with management, the shareholders&#146; auditors and
internal audit, monitor, report and, when appropriate, provide recommendations to the Board of Directors on the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Corporation&#146;s internal control system;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>compliance with the policies and practices of the Corporation
relating to business ethics;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>compliance by Directors, Officers and other management personnel
with the Corporation&#146;s Disclosure Policy; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the relationship of the Audit Committee with other committees
of the Board of Directors, management and the Corporation&#146;s
consolidated subsidiaries&#146; audit committees.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Review and discuss with the Chief Executive Officer and Chief Financial Officer of the
Corporation the process for the certifications to be provided in the Corporation&#146;s public
disclosure documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. Review, monitor, report and where appropriate, provide recommendations to the Board of Directors
on the Corporation&#146;s disclosure controls and procedures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. Establish procedures, for the receipt, retention, and treatment of complaints received by the
Corporation regarding accounting, internal accounting controls or auditing matters, including
procedures for confidential, anonymous submission by employees regarding questionable accounting or
auditing matters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. Meet periodically with management in the absence of the shareholders&#146; auditors and internal
audit.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc. 2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 53
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>E. Oversight of the Corporation&#146;s risk management</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. Review, monitor, report and, where appropriate, provide recommendations to the Board of
Directors on the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Corporation&#146;s processes for identifying, assessing and managing
risk; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Corporation&#146;s major financial risk exposures and the steps the
Corporation has taken to monitor and control such exposures.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>F. Oversight of the Corporation&#146;s environmental risks</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. Review, monitor, report, and where appropriate, provide recommendations to the Board of
Directors on the Corporation&#146;s environmental policy, and environmental management systems.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. When appropriate, ensure that the Corporation&#146;s subsidiaries establish an environmental policy,
and environmental management systems and review and report thereon to the Board of Directors of the
Corporation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>G. Compliance with legal requirements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. Review and discuss with management, the shareholders&#146; auditors and internal audit, monitor,
report and, when appropriate, provide recommendation to the Board of Directors on the adequacy of
the Corporation&#146;s process for complying with laws and regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Receive, on a periodic basis, reports from the Corporation&#146;s Chief Legal Officer, with respect
to legal issues.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">III. Evaluation of the audit committee and report to board of directors
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A. The Audit Committee shall evaluate and review with the Corporate
Governance Committee of the Board of Directors, on an annual basis,
the performance of the Audit Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">B. The Audit Committee shall review and discuss with the Corporate
Governance Committee of the Board of Directors, on an annual basis, the
adequacy of the Audit Committee charter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">C. The Audit Committee shall report to the Board of Directors
periodically on the Audit Committee&#146;s activities.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">IV. Outside advisors
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee shall have the authority to engage outside counsel and other outside
advisors as it deems appropriate to assist the Audit Committee in the performance of its functions.
The Corporation shall provide appropriate funding for such advisors as determined by the Audit
Committee.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">V. Membership
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee shall consist of such number of directors, in no event to be less than
three, as the Board of Directors may from time to time by resolution determine. The members of the
Audit Committee shall meet the independence, experience and other membership requirements under
applicable laws, rules and regulations as determined by the Board of Directors.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">VI. Audit committee chair
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Chair of the Audit Committee shall be appointed by the Board of Directors. The Chair of the
Audit Committee leads the Audit Committee in all aspects of its work and is responsible to
effectively manage the affairs of the Audit Committee and ensure that it is properly organized and
functions efficiently. More specifically, the Chair of the Audit Committee shall:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A. Provide leadership to enable the Audit Committee to act effectively in
carrying out its duties and responsibilities as described elsewhere in this
charter and as otherwise may be appropriate;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">B. In consultation with the Board Chair and the Chief Executive Officer,
ensure that there is an effective relationship between management and
the members of the Audit Committee;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">C. Chair meetings of the Audit Committee;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">D. In consultation with the Chief Executive Officer, the Corporate
Secretary&#146;s Office and the Board Chair, determine the frequency, dates
and locations of meetings of the Audit Committee;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">E. In consultation with the Chief Executive
Officer, the Chief Financial Officer, the Corporate Secretary&#146;s Office and, as required, other Officers,
review the meeting agendas to ensure all required business is brought
before the Audit Committee to enable it to efficiently carry out its duties
and responsibilities;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">F. Ensure, in consultation with the Board
Chair, that all items requiring
the Audit Committee&#146;s approval are appropriately tabled;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">G. Ensure the proper flow of information
to the Audit Committee and
review, with the Chief Executive Officer, the Chief Financial Officer, the
Corporate Secretary&#146;s Office and, as required, other Officers, the adequacy
and timing of materials in support of management&#146;s proposals;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">H. Report to the Board of Directors on the matters reviewed by, and on any decisions or
recommendations of, the Audit Committee at the next meeting of the Board of Directors following any
meeting of the Audit Committee; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I. Carry out any special assignments or any functions as requested by the Board of Directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">54 &#124;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 Annual Information Form
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 6pt">VII. Term
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The members of the Audit Committee shall be appointed or changed by resolution of the Board of
Directors to hold office from the time of their appointment until the next annual general meeting
of the shareholders or until their successors are so appointed.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">VIII. Procedures for meetings
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee shall fix its own procedure at meetings and for the calling of meetings.
The Audit Committee shall meet separately in executive session in the absence of management,
internal audit and the shareholders&#146; auditors, at each regularly scheduled meeting.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">IX. Quorum and voting
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Unless otherwise determined from time to time by resolution of the Board of Directors, two
members of the Audit Committee shall constitute a quorum for the transaction of business at a
meeting. For any meeting(s) at which the Audit Committee Chair is absent, the Chair of the meeting
shall be the person present who shall be decided upon by all members present. At a meeting, any
question shall be decided by a majority of the votes cast by members of the Audit Committee, except
where only two members are present, in which case any question shall be decided unanimously.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">X. Secretary
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Unless otherwise determined by resolution of the Board of Directors, the Corporate Secretary of
the Corporation or his/her delegate shall be the Secretary of the Audit Committee.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">XI. Vacancies
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Vacancies at any time occurring shall be filled by resolution of the Board of Directors.
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">XII. Records
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee shall keep such records as it may deem necessary of its proceedings and
shall report regularly its activities and recommendations to the Board of Directors as appropriate.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.
2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;| 55
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="128"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Schedule
2 &#151; <B>Glossary</B>
</DIV>

<P>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain capitalized words and terms used throughout this AIF are
defined below:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>lxRTT </B>means single carrier radio transmission technology;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>2006 NCIB </B>means the Normal Course Issuer Bid commenced on
 February&nbsp;3, 2006;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>3G </B>means third generation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>360networks </B>means 360networks Corporation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>AIF </B>means this Annual Information Form;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Aliant </B>means Aliant Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Aliant Telecom </B>means Aliant Telecom Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Allstream </B>means a division of MTS Allstream Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>AMPs </B>means Administrative Monetary Penalties;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>ARPU </B>means average revenue per user;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Audit Committee </B>means BCE Inc.&#146;s audit committee;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>BCE
</B>means BCE Inc., its subsidiaries, joint ventures and associated companies;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>BCE new preferred shares </B>means new first preferred shares of BCE Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>BCH </B>means Bell Canada Holdings Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>BCI </B>means Bell Canada International Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>BDI </B>means Bell Distribution Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell Aliant LP </B>means Bell Aliant Regional Communications,
 Limited Partnership;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell Canada preferred shares </B>means Bell Canada&#146;s Class&nbsp;A
preferred shares;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell ExpressVu </B>means Bell ExpressVu Limited Partnership;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell Globemedia </B>means Bell Globemedia Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell Mobility </B>means Bell Mobility Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell Nordiq </B>means Bell Nordiq Income Fund;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Bell Technical Solutions </B>means Bell Technical Solutions Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Cable VDN </B>means Cable VDN Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Call-Net </B>means Call-Net Enterprises Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CDN </B>means competitor digital network;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CEP </B>means the Communications, Energy and Paperworkers Union
 of Canada;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CGI </B>means CGI Group Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Charter </B>means The Canadian Charter of Rights and Freedoms;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CIBC Mellon </B>means CIBC Mellon Trust Company;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CIRB </B>means the Canada Industrial Relations Board;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Cisco </B>means Cisco Systems Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Clearwire </B>means Clearwire Corporation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CLEC </B>means competitive local exchange carrier;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Cogeco </B>means Cogeco Cable Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Computershare </B>means Computershare Trust Company of Canada;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Connexim </B>means Connexim Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CRTC </B>means the Canadian Radio-television and
Telecommunications Commission;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CSAs </B>means customer-specific arrangements;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CTEA </B>means the Canadian Telecommunications Employees&#146; Association;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CTV </B>means CTV Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>CTVglobemedia </B>means CTVglobemedia Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>DBRS </B>means Dominion Bond Rating Service Limited;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>DSL </B>means digital subscriber line;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>DTH </B>means direct-to-home;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>EBITDA </B>means earnings before interest, taxes, depreciation and
 amortization;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Emergis </B>means Emergis Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Enterprise </B>means large enterprise;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Entourage </B>means Entourage Technology Solutions Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>ERIP </B>means Early Retirement Incentive Program;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>EVDO </B>means Evolution, Data Optimized;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Expertech </B>means Expertech Network Installation Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>FETCO </B>means Federally Regulated Employers &#151; Transportation and
Communications;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Fitch </B>means Fitch Ratings Ltd.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>FTTN </B>means fibre-to-the-node;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>GeSI </B>means Global e-Sustainability Initiative;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Group
Telecom</B> means GT Group Telecom Services Corporation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>HD </B>means high-definition;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>ICFR </B>means internal control over financial reporting;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>ICT </B>means information and communications technology;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Inukshuk </B>means Inukshuk Wireless Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IP </B>means Internet Protocol;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IP PBX </B>means IP Private Branch Exchange;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IPTV </B>means video over Internet Protocol;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IS/IT </B>means information systems/information technologies;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>ISP </B>means Internet service provider;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IT </B>means information technology;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>iTV </B>means interactive TV;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Kbps </B>means kilobits per second;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Mbps </B>means megabits per second;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>MDU </B>means multiple-dwelling unit;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Microsoft </B>means Microsoft Corporation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Mixed CSAs </B>means CSA that includes both tariffed and
 non-tariffed services;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Moody&#146;s </B>means Moody&#146;s Investors Service, Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Motient </B>means Motient Corporation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>MPLS </B>means multi-protocol label switching;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>MSV
</B>means Mobile Satellite Ventures, L.P.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>MTNs </B>means medium term notes;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>MTS </B>means Manitoba Telecom Services Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NAS </B>means network access services;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NLOS </B>means non line-of-sight;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NorthernTel </B>means NorthernTel, Limited Partnership;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Northwestel </B>means Northwestel Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NYSE </B>means New York Stock Exchange;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Panel </B>means Telecommunication Policy Review Panel;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Primus </B>means Primus Telecommunications Canada Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>PSP Investments</B> means Public Sector Pension Investment Board;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>PVRs </B>means personal video recorders;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>ROBTv </B>means Report on Business Television;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Rogers </B>means Rogers Communications Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Rogers Cable</B> means Rogers Cable Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Rogers Wireless</B> means Rogers Wireless Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>S&#038;P </B>means Standard &#038; Poor&#146;s, a division of The McGraw-Hill

Companies, Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SAFs </B>means system access fees;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SaskTel </B>means Saskatchewan Telecommunications Holding Corporation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SFUs </B>means single family units;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Shaw </B>means Shaw Communications Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SkyTerra </B>means SkyTerra Communications, Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SMB </B>means small and medium-sized businesses;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">56
&#124;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BCE Inc. 2006 &nbsp;&nbsp;Annual Information Form
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Smiston </B>means Smiston Communications Inc.;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>STB </B>means set-top box;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>T&#233;l&#233;bec </B>means T&#233;l&#233;bec, Limited Partnership;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Teleglobe </B>means Teleglobe Inc. and Teleglobe Holdings (U.S.) Corporation;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Telesat </B>means Telesat Canada;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>TELUS </B>means TELUS Corporation;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>TerreStar </B>means TerreStar Networks, Inc.;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>TSX </B>means the Toronto Stock Exchange;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>VarTec </B>means VarTec Telecom, Inc. and VarTec Holding Company;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>VAS </B>means value-added services;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>VCIO </B>means virtual chief information officer;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>VDSL </B>means very high data rate DSL;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>VER </B>means Voluntary Early Retirement;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Vid&#233;otron </B>means Vid&#233;otron lt&#233;e;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>VoIP </B>means Voice over Internet Protocol;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>VPN </B>means virtual private network;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>WDIF </B>means Wireless Distribution Income Fund;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Yellow Pages Group </B>means YPG LP and YPG General Partner Inc.

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">BCE Inc.
2006 Annual Information Form &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#124; 57
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="m35148orm3514800.gif" alt="(BELL CANADA ENTERPRISES LOGO)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">WWW.BCE.CA</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">PRINTED IN CANADA
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all
of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on
its behalf by the undersigned, thereto duly authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>BCE Inc.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">(signed) Siim A. Vanaselja
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Siim A. Vanaselja     &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Date:&nbsp;March 14, 2007</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LIST OF EXHIBITS<BR>
TO FORM 40-F</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="85%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Canada Enterprises 2006 Annual Report</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Exhibit&nbsp;99.1</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consent of Independent Registered Chartered Accountants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Exhibit&nbsp;99.2</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Reconciliation of Canadian GAAP to United States GAAP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Exhibit&nbsp;99.3</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Report of Independent Registered Chartered Accountants
on Reconciliation of Canadian GAAP to United&nbsp;States
GAAP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Exhibit&nbsp;99.4</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Certifications of the Chief Executive Officer and the
Chief Financial Officer pursuant to Section&nbsp;302 of the<BR>
Sarbanes-Oxley Act of 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Exhibit&nbsp;99.31</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Certification of the Chief Executive Officer and the
Chief Financial Officer pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the&nbsp;Sarbanes-Oxley Act of 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Exhibit&nbsp;99.32</TD>
</TR>
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</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>m35148orexv99w1.htm
<DESCRIPTION>ANNUAL REPORT
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><b>EXHIBIT 99.1</b>
</DIV>


<DIV align="left" style="font-size: 14pt; margin-top: 12pt">Bell Canada Enterprises
</DIV>


<DIV align="left" style="font-size: 14pt; margin-top: 0pt"><I>2006 Annual Report</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">About Forward-Looking Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">About Our Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating Highlights</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Enhancing Shareholder Returns</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Selected Annual and Quarterly Information</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial Results Analysis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consolidated Analysis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Segmented Analysis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Product Line Analysis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial and Capital Management</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Competitive Environment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Regulatory Environment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assumptions and Risks Underlying</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Our Forward-Looking Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Our Accounting Policies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Controls and Procedures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-GAAP Financial Measures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">REPORTS ON INTERNAL CONTROL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Management&#146;s Report on Internal Control
over Financial Reporting</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Report of Independent Registered
Chartered Accountants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CONSOLIDATED FINANCIAL STATEMENTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Management&#146;s Responsibility
for Financial Reporting</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Report of Independent Registered
Chartered Accountants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consolidated Statements of Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consolidated Statements of Deficit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consolidated Balance Sheets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consolidated Statements of Cash Flows</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 1&nbsp; Significant Accounting Policies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 2&nbsp; Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 3&nbsp; Segmented Information</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 4&nbsp; Business Acquisitions and Dispositions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 5&nbsp; Restructuring and Other Items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 6&nbsp; Other (Expense) Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 7&nbsp; Interest Expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 8&nbsp; Income Taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 9&nbsp; Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 10 Earnings Per Share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 11 Accounts Receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 12 Other Current Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 13 Capital Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 14 Other Long-Term Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 15 Indefinite-Life Intangible Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 16 Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 17 Accounts Payable and Accrued Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 18 Debt Due Within One Year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 19 Long-Term Debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 20 Other Long-Term Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 21 Non-Controlling Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 22 Financial Instruments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 23 Share Capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">91</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 24 Stock-Based Compensation Plans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 25 Employee Benefit Plans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 26 Commitments and Contingencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 27 Guarantees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Note 28 Supplemental Disclosure for
Statements of Cash Flows</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Glossary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">106</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Board of Directors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Executives</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax Information</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shareholder Information</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>In this management&#146;s discussion and analysis of financial condition and results of operations
(MD&#038;A), </I>we<I>, </I>us<I>, </I>our <I>and </I>BCE <I>mean BCE Inc., its subsidiaries and joint ventures. References to Bell
Aliant include matters relating to, and actions taken by, both Aliant Inc. (Aliant) and its
affiliated entities prior to July&nbsp;7, 2006, and Bell Aliant Regional Communications Income Fund and
its affiliated entities on and after such date.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>All amounts in this MD&#038;A are in millions of Canadian dollars, except where otherwise noted.
Please refer to our glossary on pages 106&#151;107 for a list of defined terms.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Please refer to BCE Inc.&#146;s audited consolidated financial statements for the year ended
December&nbsp;31, 2006 when reading this MD&#038;A. Please also refer to &#147;The Quarter at a Glance&#148; section
at pages 6 to 17 of BCE Inc.&#146;s 2006 Fourth Quarter Investor Briefing dated February&nbsp;6, 2007, which
pages are incorporated herein by reference, for a more detailed discussion of BCE&#146;s operational
and financial results for the fourth quarter of 2006.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>You will find more information about BCE, including BCE Inc.&#146;s audited consolidated financial
statements and annual information form dated March&nbsp;7, 2007 (BCE 2006 AIF) for the year ended
December&nbsp;31, 2006 and recent financial reports, including BCE Inc.&#146;s 2006 Fourth Quarter Investor
Briefing, on BCE Inc.&#146;s website at www.bce.ca, on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This MD&#038;A comments on BCE&#146;s operations, performance and financial condition for the years
ended December 31, 2006 and 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>About Forward-Looking Statements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities laws encourage companies to disclose forward-looking information so that investors
can get a better understanding of the company&#146;s future prospects and make informed investment
decisions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE&#146;s 2006 annual report, including this MD&#038;A, contains forward-looking statements about
BCE&#146;s objectives, plans, strategies, financial condition, results of operations, cash flows and
businesses. A statement we make is forward-looking when it uses what we know and expect today to
make a statement about the future. Forward-looking statements may include words such as
<I>anticipate</I>, <I>assumption</I>, <I>believe</I>, <I>could</I>, <I>expect</I>, <I>goal</I>, <I>guidance</I>, <I>intend</I>, <I>may</I>, <I>objective</I>, <I>outlook</I>,
<I>plan</I>, <I>seek</I>, <I>should</I>, <I>strive</I>, <I>target </I>and <I>will</I>. These statements are forward-looking because they are
based on our current expectations, estimates and assumptions about the markets we operate in, the
Canadian economic environment and our ability to attract and retain customers and to manage
network assets and operating costs. All such forward-looking statements are made pursuant to the
&#145;safe harbor&#146; provisions of the <I>United States Private
Securities Litigation Reform Act of 1995</i> and
of any applicable Canadian securities legislation. It is important to know that:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> <B>&nbsp;&nbsp;&nbsp;unless otherwise indicated, forward-looking statements in BCE&#146;s 2006 annual report,
including in this MD&#038;A, describe our expectations at March&nbsp;7, 2007</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;our actual results could differ materially from what we expect if known or unknown risks
affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, we
cannot guarantee that any forward-looking statement will materialize and, accordingly, you are
cautioned not to place undue reliance on these forward-looking statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;except as otherwise indicated by BCE, forward-looking statements do not take into
account the effect that transactions or non-recurring or other special items announced or
occurring after the statements are made may have on our business. Such statements do not, unless
otherwise specified by BCE, reflect the impact of dispositions, sales of assets, monetizations,
mergers, acquisitions, other business combinations or transactions, asset write-downs or other
charges announced or occurring after forward-looking statements are made. The financial impact of
these transactions and non-recurring and other special items can be complex and depends on the
facts particular to each of them. We therefore cannot describe the expected impact in a meaningful
way or in the same way we present known risks affecting our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;we disclaim any intention and assume no obligation to update or revise any
forward-looking statement even if new information becomes available, as a result of future events
or for any other reason.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A number of assumptions were made by BCE in making forward-looking statements in BCE&#146;s 2006 annual
report, including in this MD&#038;A, such as certain Canadian economic and market assumptions,
operational and financial assumptions, and assumptions about transactions. Certain factors that
could cause results or events to differ materially from our current expectations include, among
others, our ability to implement our strategies and plans, the intensity of competitive activity
and the ability to achieve customer service improvement while significantly reducing costs.
Assumptions made in the preparation of forward-looking statements and risks that could cause our
actual results to differ materially from our current expectations are discussed throughout this
MD&#038;A and, in particular, in the section entitled <I>Assumptions and Risks Underlying Our
Forward-Looking Statements</I>. Important additional assumptions and risks are also discussed under
the sections entitled <I>Competitive Environment </I>and <I>Regulatory Environment</I>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>

</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>About Our Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE is Canada&#146;s largest communications company. Bell Canada, which encompasses our core
business operation, is the nation&#146;s leading provider of wireline and wireless communications
services, Internet access, data services and video services to residential and business customers.
We report Bell Canada&#146;s results of operations in four segments, each reflecting a distinct
customer group: Residential, Business, Bell Aliant and Other Bell Canada. All of our other
activities are reported in the Other BCE segment. Our reporting structure reflects how we manage
our business and how we classify our operations for planning and measuring performance. We discuss
our consolidated operating results in this MD&#038;A, as well as the operating results of each segment.
See Note 3 to the consolidated financial statements for additional information about our segments.
We also discuss our results by product line to provide further insight into these results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The chart below shows the operating revenues that each segment contributed to total operating
revenues for the year ended December&nbsp;31, 2006. Some of these revenues vary slightly by season.
Business segment revenues tend to be higher in the fourth quarter because of higher levels of
voice and data equipment sales. Our operating income can also vary by season. Residential segment
operating income tends to be lower in the fourth quarter due to the higher costs associated with
greater subscriber acquisition during the holiday season.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514801.gif" alt="(PIE CHART)">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RESIDENTIAL SEGMENT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Residential segment provides local telephone, long distance, wireless, Internet access,
video and other services to Bell Canada&#146;s residential customers, mainly in urban Ontario and
Qu&#233;bec. Wireless services and video services are provided nationwide.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Local telephone and long distance services are sold under the Bell brand, wireless services
through Bell Mobility Inc. (Bell Mobility), Internet access under the Sympatico brand and video
services through Bell ExpressVu Limited Partnership (Bell ExpressVu).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BUSINESS SEGMENT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Business segment provides local telephone, long distance, wireless, data (including
Internet access) and information and communications technology (ICT)&nbsp;services to Bell Canada&#146;s
large enterprise (Enterprise) customers and small and medium-sized businesses (SMB)&nbsp;in Ontario and
Qu&#233;bec, as well as to business customers in Western Canada through Bell West, our division offering
competitive local exchange carrier (CLEC)&nbsp;services in Alberta and British Columbia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BELL ALIANT SEGMENT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Formed on July&nbsp;7, 2006, Bell Aliant is North America&#146;s second largest regional
telecommunications service provider and the largest business trust in Canada, providing local
telephone, long distance, data (including Internet access), and other services to residential and
business customers in Atlantic Canada and parts of Central Canada. Bell Aliant combines Bell
Canada&#146;s former regional wireline operations in the less populated areas of Ontario and Qu&#233;bec with
Aliant&#146;s former wire-line, information technology (IT)&nbsp;and related operations in Atlantic Canada,
and also includes Bell Canada&#146;s former 63.4% interest in NorthernTel Limited Partnership
(NorthernTel) and T&#233;l&#233;bec Limited Partnership (T&#233;l&#233;bec) held indirectly through Bell Nordiq Group
Inc. (Bell Nordiq). At December&nbsp;31, 2006, BCE owned approximately 45% of Bell Aliant. The remaining
55% was publicly held.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">OTHER BELL CANADA SEGMENT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Other Bell Canada segment includes Bell Canada&#146;s Wholesale business and the financial
results of Northwestel Inc. (Northwestel). Our Wholesale business provides various access and
network services to other resale or facilities-based providers of local, long distance, wireless,
Internet, data and other telecommunications services. Northwestel provides telecommunications
services to less populated areas of Canada&#146;s northern territories. At December&nbsp;31, 2006 Bell Canada
owned 100% of Northwestel.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">OTHER BCE SEGMENT

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Other BCE segment includes the financial results of our satellite services subsidiary,
Telesat Canada (Telesat), as well as our corporate office.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Telesat is a pioneer in satellite communications and systems management and is an experienced
consultant in establishing, operating and upgrading satellite systems worldwide. BCE Inc. owns 100%
of Telesat. Consistent with its strategy of concentrating on its core communications business, BCE
Inc. announced the sale of Telesat to a new company formed by Canada&#146;s Public Sector Pension
Investment Board (PSP Investments) and Loral Space &#038; Communications Inc. (Loral) on December&nbsp;18,
2006. BCE Inc. will, at closing of the sale, realize total proceeds of $3.25&nbsp;billion from the
all-cash transaction. The sale is subject to customary closing conditions, including regulatory
approval both in Canada and the United States and the absence of a material adverse change
affecting Telesat&#146;s business. The transaction is expected to close in mid-2007. In conjunction with
the sale, BCE Inc. has put into place a set of commercial arrangements between Telesat and Bell
ExpressVu that guarantee Bell ExpressVu access to current and expanded satellite capacity,
including services available after the launch of Telesat&#146;s Nimiq 5 satellite in 2009. We do not
account for Telesat as discontinued operations because of the ongoing commercial relationships
between BCE and Telesat that will continue after the sale is complete.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A transaction involving the reorganization of the ownership of CTVglobemedia Inc.
(CTVglobemedia, formerly Bell Globemedia Inc.) was announced on December&nbsp;2, 2005 and completed on
August&nbsp;30, 2006. As of August&nbsp;31, 2006, we have accounted for CTVglobemedia as a discontinued
operation and no longer consolidate its financial results. Our remaining 15% investment is
accounted for at cost.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BELL CANADA PRODUCTS AND SERVICES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada is our primary focus and the largest component of our business. It has six major
lines of business:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>local and access services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>long distance services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>wireless services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>data services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>video services</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>terminal sales and other.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Local and Access Services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada operates an extensive local access network that provides local telephone services
to business and residential customers. The 12&nbsp;million local telephone lines, or network access
services (NAS), we provide to our customers are key in establishing customer relationships and are
the foundation for the other products and services we offer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Local telephone service is the main source of local and access revenues. Other sources of
local and access revenues include:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;value-added services (VAS), such as call display, call waiting and voicemail
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;services provided to competitors accessing our local network
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;connections to and from our local telephone service customers for competing long distance
service providers
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;subsidies from the National Contribution Fund to support local service in high-cost
areas.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Rates for local telephone and VAS services in our incumbent territories are regulated by the
Canadian Radio-television and Telecommunications Commission (CRTC). Although these regulations
continue to restrict our local and access business with respect to bundling and packaging of local
services with other non-regulated services and limitations on customer winback promotions, on
December&nbsp;11, 2006 the federal government put forth a proposal to accelerate deregulation of retail
telephone prices by implementing new forbearance criteria based on either a competitive
facilities-based or competition-based test. Under the new proposal, restrictions on customer
winbacks and other promotions would be immediately ended. In addition, the CRTC would consider each forbearance
application on a priority basis and would make a decision within 120&nbsp;days. We believe that the
federal government proposal could be adopted as early as the end of the first quarter of 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The local telephone services market became increasingly competitive in 2006 as the major cable
operators in our Qu&#233;bec and Ontario markets expanded the reach of their low-priced cable telephony
services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>

</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Long Distance Services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We supply long distance voice services to residential and business customers. We also receive
settlement payments from other carriers for completing their customers&#146; long distance calls in our
territory.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prices for long distance services have been declining since this market was opened to
competition. In 2006, our long distance services business continued to face intense competitive
pressure given the expanded presence of cable telephony and the continuing impact from
non-traditional suppliers (i.e., prepaid card, dial-around and other voice over Internet protocol
(VoIP) providers).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Wireless Services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We offer a full range of wireless voice, data and paging communications products and services
to residential and business customers across Canada. We also provide an array of VAS across our
voice and data platforms such as call display and voicemail, e-mail and video streaming, music
downloads, ringtones and games, as well as roaming services with other wireless service providers.
Customers can choose to pay for their services through a monthly rate plan (postpaid)&nbsp;or in advance
(prepaid). At the end of 2006, we had approximately 5.9&nbsp;million wireless customers and 0.3&nbsp;million
paging customers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our wireless division, Bell Mobility Inc. (Bell Mobility), provides wireless communications
services nationwide under the Bell Mobility, Solo Mobile and Aliant Mobility brands. During 2006,
Solo Mobile was repositioned in the wireless market as a value brand that broadly appeals to
mass-market consumers instead of a brand that is geared primarily towards the youth segment. In
addition, we have a joint venture with the Virgin Group to offer wireless services under the Virgin
brand across Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our wireless network provides voice services, and data services at typical transmission speeds
of approximately 120 Kbps delivered over our existing single-carrier radio transmission technology
(1xRTT) network. In 2005, we launched Canada&#146;s first Evolution, Data Optimized (EVDO)&nbsp;wireless data
network in Toronto and Montr&#233;al. EVDO technology is the third generation (3G) of wireless networks
delivering average data download speeds of 400&#151;700 kilobits per second (Kbps) with peaks of up to
2.4 megabits per second (Mbps). We expect to continue our deployment of EVDO in other major
Canadian urban centres and other areas in 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the end of 2006, our wireless network covered:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;95% of the population of Ontario and Qu&#233;bec
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;approximately 90% of the population of Atlantic Canada
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;the major cities in the provinces of Alberta and British Columbia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Data Services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">High-speed Internet access service provided through digital subscriber line (DSL)&nbsp;technology
for residential and business customers is a growth area for Bell Canada. At the end of 2006, we had
approximately 2.5&nbsp;million high-speed Internet customers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our DSL high-speed Internet access footprint in Ontario and Qu&#233;bec reached more than 89% of
homes and 92% of business lines passed at the end of 2006. In Bell Aliant&#146;s territory, comprised of
Atlantic Canada and rural Ontario and Qu&#233;bec, DSL high-speed Internet was available to over 70% of
homes and over 80% of businesses at the end of 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2006, we launched Sympatico Optimax, a premium high-speed service, delivering
consistently fast Internet services with speeds up to 16 Mbps. We also upgraded our broadband
access speed for DSL Basic customers in Ontario from 512 kilobits per second (Kbps) to 1&nbsp;Mbps. We
also offer a Basic Lite DSL service at 128 Kbps and an Ultra high-speed product for residential and
SMB customers at 5 Mbps and 6&nbsp;Mbps, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2006, Inukshuk Wireless Inc. (Inukshuk), a joint venture between Bell Canada and Rogers
Communications Inc. (Rogers Communications), completed the initial phase of its new wireless
broadband network covering five million households, representing 40% of the population in 20 urban
centres across Canada. This next-generation Internet protocol (IP)&nbsp;wireless network, based on
pre-WiMax standards, enables portable services allowing subscribers to access
the Internet and other applications such as VoIP and video streaming. Inukshuk was launched in
2003 to provide wireless high-speed Internet access across Canada using spectrum in the 2.5 GHz
range.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We offer a full range of data services to business customers, including Internet access,
IP-based services, ICT solutions and equipment sales. While we still offer legacy data services, we
no longer sell legacy data services other than to current customers.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Video Services

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are Canada&#146;s largest digital television provider, nationally broadcasting more than 500
all-digital video and audio channels and a wide range of domestic and international programming. We
also offer hardware, including personal video recorders (PVRs), interactive television (iTV)
services and the most extensive lineup of high definition (HD)&nbsp;channels in Canada. We currently
distribute our video services to more than 1.8&nbsp;million customers through Bell ExpressVu and Bell
Canada in one of three ways:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>direct-to-home (DTH)&nbsp;satellite &#151; </I>we have been offering DTH video services nationally
since 1997 and currently use four satellites, Nimiq 1, Nimiq 2, Nimiq 3 and Nimiq 4-interim.
Telesat operates or directs the operation of these satellites.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>very high bit rate DSL (VDSL) &#151; </I>this allows us to expand our reach to the
multiple-dwelling unit (MDU)&nbsp;market. By the end of 2006, we had signed access agreements with 988
buildings and had provisioned 514 of them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>hybrid fibre co-axial cable &#151; </I>on August&nbsp;2, 2005, we acquired the residential assets of
Cable VDN Inc. (Cable VDN), a Montr&#233;al-based cable company selling residential analog and digital
TV. Cable VDN has over 14,600 residential cable subscribers in the Montr&#233;al area, representing an
approximate 28% penetration within its current footprint. We believe that Cable VDN provides us
with a more cost-effective way of addressing the MDU market in Montr&#233;al, compared to VDSL, allowing
for quicker access to smaller, harder to reach MDUs.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, we intend to continue investing in our IPTV (video over Internet protocol) platform
that will target urban households in markets within the Qu&#233;bec City to Windsor corridor. In 2004,
we received CRTC approval of our broadcast licence application to deliver video services
terrestrially to single-family units (SFUs). We continued technical trials of our IPTV service in
2006. Bell Canada is currently providing limited service in both Montr&#233;al and Toronto. IPTV will
offer increased interactivity to experience a variety of digital content on television.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signal piracy continues to be a major issue facing all segments of the Canadian broadcasting
industry. During 2006, we continued our ongoing efforts against television signal theft, including
sophisticated set-top box (STB)&nbsp;tracking systems and specific point-of-sale practices such as
obtaining customer photo identification and credit card information, aggressive measures to
investigate and initiate legal action against persons engaged in the manufacture, sale and
distribution of signal theft technology, and enforcement of policies with authorized retailers to
combat piracy, including a zero tolerance policy for activities related to signal theft.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Terminal Sales and Other
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This category includes revenues from a number of other sources, including:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;renting, selling and maintaining business terminal equipment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;wireless handset and video STB sales
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;network installation and maintenance services for third parties
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;IT services provided by Bell Aliant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">OUR STRATEGIC PRIORITIES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We accelerated the transformation of the company in 2006, increasing our focus on execution to
strengthen the operational foundations we have put in place over the last three years to drive a
shift in our revenue mix towards growth services, reset our cost base and return to our core
communications business. We also continued to strengthen all three strategic pillars &#151; improving
the customer experience, enhancing bandwidth and developing next-generation services &#151; while
sharpening our marketing fundamentals, which enabled us to step up to the competitive challenges of
cable telephony more effectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The three pillars will continue to be critical in 2007, as will our efforts to improve our
operational efficiency and productivity. We will also place a growing focus on enhancing the
experience of our customers. It is how we will differentiate our business from the competition to
build customer loyalty as we drive the profitable expansion of our growth services and slow the
decline of our traditional voice and data businesses. However, service alone will not make
us competitive. We must also continue to deliver products, services and solutions that make a
difference for customers. We will continue to invest in developing growth services and enhancing
the networks on which they run. In 2007, the majority of our capital spending will be in areas such
as enhancing customer service, wireless operations and our advanced residential broadband network.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">6 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>

</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have established five operational priorities for 2007 to achieve our objective of
delivering consistent, reliable, high-quality communications services to customers efficiently and
cost-effectively:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. <I>Service quality &#151; </I>We are determined to consistently meet or exceed customer expectations and
enhance their overall experience with Bell Canada. This focus on improving the total client
experience will help to differentiate us from our competitors and ensure long-term customer loyalty
to the Bell brand and products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. <I>Broadband acceleration &#151; </I>We will continue to invest in advanced network enhancements, such as
the continued rollout of fibre-to-the-node (FTTN)&nbsp;technology, in order to expand the reach and
speed of our DSL Internet service and to enable IPTV services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. <I>Wireless growth &#151; </I>A key driver of growth and financial performance, the wireless business will
be supported by an expanded array of handsets and devices, new products and features, expected
growth in data usage, ongoing enhancements to broadband EVDO and overall network quality. We are
focused on delivering continued improvements in average revenue per user (ARPU)&nbsp;and data growth,
while acquiring our competitive share of net subscriber additions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. <I>Business sector profitability &#151; </I>With a focus on ICT/ virtual chief information officer (VCIO)
profitability, we will leverage the unique capabilities and scale in our Enterprise and SMB
operations to take advantage of market opportunities and pull through connectivity revenues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. <I>Productivity improvements &#151; </I>A core element of financial performance, productivity improvements
have enabled Bell Canada&#146;s increased competitiveness in the marketplace. Cost discipline remains a
centrepiece of our strategy, with productivity improvements expected to contribute to further
improvement in earnings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to execute these priorities based on a foundation of market leadership behaviour and
a balance between profitable growth and enhanced market share. With an increasingly cost-efficient
structure, we believe that we are well positioned to leverage our network capabilities as well as
our product and brand assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2006, we made significant progress in building upon each of our three key strategic
pillars.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Enhancing customer experience by providing superior products and service that build loyalty
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;Our multi-product household strategy continued to drive increased penetration of
households subscribing to three or more products (a combination of local wireline, Internet, video,
wireless and long distance services), reaching over 25% of total households in our Ontario and
Qu&#233;bec footprint at the end of 2006, up from 22% at the end of
2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;At the end of 2006, approximately six million clients were enjoying the benefits of a
single bill for their wire-line, Internet, video and/or wireless services (our One Bill program),
compared with approximately two million at the end of 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;As a result of our DSL hardening program, which has improved the performance of the
network through software upgrades and installation of new hardware, we reduced major outages of our
high-speed Internet service by 12% in 2006 compared with the previous year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;We delivered improved service commitments and service levels in 2006 by reducing the
total number of missed appointments for fixed wireline installations and repairs by approximately
3% and 15%, respectively, over the previous year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;Our first call resolution rate in the Residential segment improved 2.1&nbsp;percentage points
in 2006 to approximately 81%.</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;Sympatico, our Internet service provider to Residential and SMB customers, launched new
desktop tools enabling customers to diagnose and correct configuration settings on their own or
remotely through a call centre agent. These new tools are intended to drive self-service and reduce
the average handling time of calls in our contact centres.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;As at the end of 2006, 93% of our Enterprise customers had adopted our online bill
manager tool, a service that provides self-serve capabilities for business customers, enabling them
to view, track and pay invoices online and to produce customized reports.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;Our Enterprise unit began the implementation of Service Desk, which will integrate
connectivity and ICT customer care to create a single point of contact for the customer.</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, we intend to continue improving service and enhancing the customer experience. In
particular, we plan to:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;drive service quality so that it sets us apart in the market
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;deliver improved service commitments and service levels by significantly reducing
the number of missed appointments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;achieve distribution excellence by expanding our points of presence, refreshing
existing stores, and enhancing existing channels such as 310-BELL and bell.ca
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;expand our handset and device portfolios
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;improve processes to simplify customer transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Deliver abundant and reliable bandwidth to enable next-generation services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;We carried on with our rollout of FTTN by deploying another 1,564 neighbourhood nodes in
2006, raising the total number of nodes deployed to 3,612. In total, we currently expect to deploy
approximately 11,000 to 12,000 nodes by 2011 for a total cost of approximately $1.2&nbsp;billion, of
which approximately $400&nbsp;million has been spent as of the end of 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;We continued to invest in our high-speed EVDO mobile data network by expanding the
footprint to a number of cities and towns in Ontario, Qu&#233;bec, British Columbia and Alberta,
bringing coverage to 55% of the Canadian population.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;We launched Sympatico Optimax, a high-speed Internet service that leverages the latest
fibre optic technology, across significant parts of Toronto and Montr&#233;al. The service offers an
Internet connection that delivers consistently fast Internet service, with speeds of up to 16 Mbps.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Inukshuk, our joint venture with Rogers Communications, completed the initial phase of
its new wireless broadband network that reaches five million households representing 40% of the
population in 20 urban centres across Canada. This next-generation IP wireless network enables
portable services allowing subscribers to access the Internet and other applications such as VoIP
and video streaming.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, we intend to continue to expand the reach and speed of DSL service through our FTTN
rollout, which will enable speeds of up to 26 Mbps. In the future, as consumer demand for
bandwidth-intensive applications increases, we believe that FTTN bandwidth speeds can be increased
to more than 40 Mbps through techniques such as shortening very high data rate DSL (VDSL)&nbsp;loop
lengths and bonding twisted-pair copper telephone lines. At the same time, the Inukshuk fixed
wireless broadband access network footprint will continue to be expanded. We also plan to complete
implementation of the EVDO across our remaining wireless coverage areas.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Create next-generation services to drive ongoing profitable growth
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell Mobility launched a number of new services designed to drive data growth, including:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;Groove Client, a music download service
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;a music video ringtones service that allows customers to listen to and/or watch
digital music videos directly on their wireless phone
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;various video clip services featuring exclusive NHL hockey game highlights, MTV video
highlights and images, and news and business reports from CTV News and Report on Business
Television (ROBTv).
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell ExpressVu continued to build on its expansive retail offering of leading HD services
with the launch of 12 new HD channels during the year. HD television, with its high-resolution
images and theatre-quality sound, provides a viewing experience that is richer and more visually
captivating than standard television. In addition, our video unit enhanced its lineup of iTV
programming, providing the best interactive and on-demand news, weather and sports experience.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Sympatico, our Internet service provider to Residential and SMB customers, started
marketing several new products and service in 2006, including:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;an enhanced version of its MSN Music Store, which offers customers safe and secure
pay-per-download of high-quality music tracks via credit card payment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;&#145;Personal Vault&#146;, a comprehensive online storage solution that is available exclusively
from Bell Canada to backup, access and share content such as digital photos, financial records,
music and video files
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;Canada&#146;s first subscription-based fraud protection service
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;Sympatico Unplugged, a high-speed portable Internet access product that offers speeds
comparable to current residential and SMB offerings.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Our Enterprise unit expanded its service offering in 2006 with applications such as IP
audio conferencing and an enhanced IP virtual private network (IP VPN) product with global
capabilities and advanced customer reporting functionality.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">8 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Our SMB unit introduced several new products this year, including:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;Business Internet Unplugged, a portable wireless DSL service
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#150;</B>&nbsp;Managed IP, an IP Private Branch Exchange (IP PBX) monitoring, management and maintenance
service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, our objective is to drive the introduction of new products and services that balance
innovation with profitability and that are brought to market more quickly. We plan to introduce
EVDO-enabled data applications and other services to our wireless customers in order to deliver
continued improvements in ARPU and data growth, as well as expand our residential broadband
services to help customers manage information needs in their homes by leveraging our Sympatico-MSN
portal. In our video unit, we intend to drive growth by investing in new growth areas, such as IPTV
and HD programming, in our goal of becoming the leader in &#147;on-demand&#148; television. In the Business
segment, our Enterprise unit will continue its efforts to expand its ICT solutions by focusing on
network-supported applications and services in the financial services and federal, provincial and
large municipal government sectors, as well as by concentrating on key customers in the retail,
distribution and manufacturing sectors. We will also strengthen our capabilities in data and
network security and business resilience. The overall objective within our SMB unit is to drive
greater profitability through stronger organic growth with its refined VCIO strategy and the
expansion of existing value-added services that build on the strengths of recent business
acquisitions, as well as sale force and mid-market customer realignment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">TRANSFORMING OUR COST STRUCTURE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Overall, our various cost-reduction initiatives resulted in savings of $724&nbsp;million in 2006,
which brought the total amount of cost savings since 2004 to approximately $1.6&nbsp;billion. Cost
savings this year were realized primarily through process improvements in our business units and
our supply chain transformation program, which contributed to maintaining Bell Canada&#146;s
EBITDA<SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP>margin stable year-over-year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost reductions from efficiency-related process improvements amounted to $341&nbsp;million in 2006
and were driven primarily by:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;a reduction in the number of invoices printed and mailed to our Residential
customers under the One Bill initiative
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;more efficient contact centre operations, resulting in lower call volumes
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;a reduction in the number of missed commitments for fixed wireline installations and
repairs
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;workforce reductions stemming from greater use of outsourcing and other productivity
initiatives.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to our workforce reduction program for 2006, our original plan called for 3,000
to 4,000 employee departures. In total, over 3,300 employee departures took place. However, this
was offset by approximately 550 positions which were added in the year in support of our revenue
growth and service quality initiatives. As a result, net employee departures totalled approximately
2,750 in the year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supply transformation savings of $383&nbsp;million in 2006 were realized from:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;increased controls over discretionary spending
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;reduced spending on IT services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;outsourcing of selected contact centre call volumes
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;renegotiated contracts resulting in rate reductions and vendor rebates for wireless
handsets, wireline data and voice equipment, and Internet portal services that we resell
to our customers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Operating Highlights</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our results for 2006 showed step-by-step progress in operational execution as underlying
business trends began to exhibit signs of improvement. We intensified our focus on generating
profitable recurring service revenue streams, while continuing to drive productivity improvements and cost efficiencies throughout the
organization. Our growth services portfolio, which grew by about 11% this year, now represents a
majority of Bell Canada&#146;s revenues, accounting for 51% of the total at the end of 2006. This was
enabled by a significant improvement in wireless, video and Internet ARPU, as well as by increased
sales of ICT solutions. As expected, local line losses in 2006 increased year over year as a result
of the expanded competitive presence of lower-priced cable telephony service offerings in our
markets. Our focus on profitable and disciplined subscriber growth, coupled with cost savings of
more than $700&nbsp;million and a reduced emphasis on low-margin equipment sales, allowed us to maintain
stable EBITDA margins at Bell Canada year over year, despite the erosion of our legacy wireline
business. Higher EBITDA, as well as capital spending efficiency, improved free cash
flow<SUP style="font-size: 85%; vertical-align: text-top">(2) </SUP>in 2006.
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt ; margin-left:20px; text-indent:-20px"><I>(1)&nbsp;EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP
financial measure. See </I>Non-GAAP Financial Measures &#151; EBITDA <I>in this MD&#038;A for more details
including a reconciliation to the most comparable GAAP financial measure.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt ; margin-left:20px; text-indent:-20px"><I>(2)&nbsp;Free cash flow is a non-GAAP financial measure. See </I>Non-GAAP Financial Measures &#151; Free
cash flow <I>in this MD&#038;A for more details including a reconciliation to the most comparable GAAP
financial measure.</I>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also made steady progress in the area of customer service this year by resolving
customer issues more promptly, enhancing the performance of our high-speed Internet network and
improving service for wireline installations and repairs, all of which contributed to a higher
level of customer satisfaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CUSTOMER CONNECTIONS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TOTAL</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NET ACTIVATIONS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CONNECTIONS</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><i>(in thousands)</i></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">DECEMBER 31, <b>2006</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">NAS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(525</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,056</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">High-speed Internet</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>267</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,462</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wireless</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>432</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,873</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Video</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>93</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,820</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514802.gif" alt="(BAR GRAPH)">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">NAS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">NAS in service declined by 525,000 in 2006 or 4.2%, representing a higher rate of decline than
the 2.5% reported in 2005. The accelerated rate of erosion in the number of local access lines was
due primarily to the competitive entry in 2005 of cable operators with lower-priced cable telephony
services to our Qu&#233;bec and Ontario markets. Increased customer winbacks and higher wholesale demand
for access lines in Western Canada lessened the decline.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">High-Speed Internet
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We added 267,000 new net high-speed Internet customers in 2006, increasing our base by 12.2% to
2,462,000. The net activations achieved in 2006 were lower than the 387,000 new subscribers
acquired in 2005. The year-over-year decline in new subscriber additions was due mainly to the fact
that net activations in 2005 were fuelled by the growth of our Basic Lite products and extensive
footprint expansion.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Wireless
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our wireless subscriber base grew by 432,000 in 2006 to 5,873,000, representing a 7.9% increase
compared to the previous year. While new subscriber activations were lower than the 516,000
achieved in 2005, higher revenue-generating postpaid subscribers accounted for 71% of the total net
activations in 2006, up from 56% in 2005, due to significantly improved customer retention.
Although we experienced higher prepaid churn during the year, our overall churn rate improved 0.1
percentage points, year-over-year, to 1.5%, due to lower postpaid churn.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Video
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, we activated service for 93,000 new net video customers, down from 224,000 in 2005, to
end the year with 1,820,000 subscribers. This result represents a 5.4% increase in our subscriber
base over the previous year. The lower number of net activations can be attributed to a slight
increase in our churn rate from 0.9% in 2005 to 1.0% in 2006, fewer sales in our retail channels
compared with the previous year, and our increased focus on profitable growth. Net activations in
2005 also reflected the acquisition of Cable VDN, which added an incremental 12,500 customers to
our video subscriber base.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">LABOUR SETTLEMENT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;15, 2006, we reached an agreement with the Communications, Energy and Paperworkers Union
of Canada (CEP)&nbsp;on pay equity that benefits 4,765 current and former Bell Canada employees, mostly
operators. The settlement covers Bell Canada employees represented by the CEP in positions occupied
primarily by women. The settlement included lump sum payments and pension adjustments worth
approximately $104&nbsp;million. The cash portion of the settlement (approximately $66&nbsp;million) is
reflected on the cash flow statement within cash flows from operating activities (operating assets
and liabilities). The full amount of the cash portion of the settlement was accrued in previous
years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">10 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">EXPERTECH NETWORK INSTALLATION
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The collective agreements between the CEP and Expertech Network Installation Inc. (Expertech)
representing approximately 160 clerical and 1,300 craft and services employees have both expired on
November&nbsp;30, 2006. The parties have been in negotiations since November&nbsp;2006. A first offer by
Expertech was rejected by both bargaining units&#146; employees on December&nbsp;20, 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;26, 2007, the craft and services employees rejected Expertech&#146;s final offer at
64.5% whereas its clerical employees accepted the offer at 78.3%. Expertech&#146;s craft and services
employees will only obtain their right to strike if and once the CEP gives 72 hour notice to
Expertech indicating the date after which a strike will occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of this vote, Expertech declared it was unable to restructure its operations and
announced the wind-down of its operations. Bell Canada announced that it would work with Expertech
toward an orderly and timely wind-down of its activities and would transfer its work to many local
suppliers in Qu&#233;bec and Ontario.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;5, 2007, the CEP and Expertech announced that an agreement had been reached on some
refinements to Expertech&#146;s final offer that, if accepted by union members, would allow Expertech to
avoid closure. This offer has been put to a vote by the craft and services employees. The results
will be announced on March&nbsp;19, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of the bargaining process, the CEP filed, in December&nbsp;2006, a single employer and a
sale of business application before the Canada Industrial Relations Board (CIRB)&nbsp;against Bell
Canada and Expertech. Hearings are scheduled in May and June&nbsp;2007. Should the CEP be successful
with these applications, Bell Canada could be bound by the collective agreements now covering
Expertech&#146;s employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An arbitration decision was received by Expertech in December&nbsp;2006 under which it was ordered
to make the Bell Canada 2004 Voluntary Early Retirement (VER)&nbsp;program available to all employees
covered by the craft and services collective agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Enhancing Shareholder Returns</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On July&nbsp;10, 2006, BCE Inc. distributed approximately 64,628,000 units of Bell Aliant,
representing an approximate 28.8% interest in Bell Aliant on a fully-diluted basis, to all its
common shareholders on a pro-rata basis and concurrently reduced the number of its common shares
outstanding by approximately 8% through a share consolidation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;12, 2006, BCE Inc. announced, subject to being declared by the board of directors,
an 11%, or $0.14 per share, increase in its annualized common share dividend.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc. also announced plans to renew its share buy-back program for another twelve-month
period to purchase for cancellation up to 40&nbsp;million common shares through a normal course issuer
bid (NCIB), representing approximately 5% of its outstanding common shares for an estimated value
in excess of $1&nbsp;billion. The company received acceptance from the Toronto Stock Exchange (TSX)&nbsp;on
February&nbsp;6, 2007 of its notice of intention to make a NCIB. Purchase of the shares will be carried
through the TSX and/or New York Stock Exchange and will be made in accordance with the requirements
of those exchanges. Purchases of common shares could be made from time to time, at market prices,
during the period starting February&nbsp;9, 2007 and ending no later than February&nbsp;8, 2008. Pursuant to
the company&#146;s previous NCIB, which began on February&nbsp;3, 2006 and expired on February&nbsp;2, 2007, BCE
Inc. purchased and cancelled a total of 45&nbsp;million common shares for a total cash outlay of $1,241
million, representing an average purchase price of approximately $27.50 per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In line with our corporate simplification program, we completed a number of important steps
during the year to reshape the company&#146;s asset portfolio and bring greater focus to our
communications operations. In addition to selling our remaining interest in CGI Group Inc. (CGI)
and reducing our interest in CTVglobemedia to 15%, we created Bell Aliant, announced the sale of
Telesat and began the process of rationalizing BCE Inc.&#146;s holding company structure. As a result of
these strategic initiatives and others that we have completed over the last few years, we have
simplified our corporate organization, improved the revenue mix between growth and legacy products
and services, and strengthened our operational capacity.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Selected Annual and Quarterly Information</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>This section shows selected financial and operational data.</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ANNUAL FINANCIAL INFORMATION

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following tables show selected consolidated financial data, prepared in accordance with
Canadian GAAP, for each year from 2002 to 2006. We discuss the factors that caused our results to
vary over the past two years throughout this MD&#038;A.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2002</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,713</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,114</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(10,384</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10,371</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,895</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,704</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10,009</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EBITDA</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,329</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,105</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,129</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,061</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,001</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,932</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net benefit plans (cost)&nbsp;credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(513</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(359</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(241</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(168</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(355</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(55</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,219</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(14</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(768</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,441</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other (expense)&nbsp;income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(176</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,139</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Impairment charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(765</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(952</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(949</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(961</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,064</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,080</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pre-tax earnings from continuing
operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,204</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,735</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(85</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(803</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(605</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,079</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,551</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(228</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(201</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(132</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(166</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(860</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Earnings from continuing operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,891</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,324</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings before extraordinary gain</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,407</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Extraordinary gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,407</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(70</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(64</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(59</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Premium on redemption of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings applicable to common shares</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,937</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,342</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Included in net earnings:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net gains on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>419</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(81</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,351</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>106</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(222</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(37</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(770</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(441</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Impairment charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(26</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cost incurred to form Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(42</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings per common share:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Continuing operations &#151; basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.12</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Continuing operations &#151; diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.12</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.62</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings &#151; basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings &#151; diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.62</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Ratios</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">EBITDA margin (%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>41.4</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">41.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">41.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">42.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">41.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">EBITDA to interest ratio (times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7.70</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating margin (%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>18.8</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">21.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">15.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">23.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">20.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ROE (%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>15.7</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">12.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">15.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">17.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">12 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2002</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance Sheet</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>36,957</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,388</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt (including current portion)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,817</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,220</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,272</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,702</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total capitalization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>27,819</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,880</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,670</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,510</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>11,697</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,090</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Ratios</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net debt to total capitalization (%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>44.1</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">41.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">41.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">43.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">47.6</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net debt to EBITDA (times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1.67</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total debt to total assets (times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.35</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt to equity (times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.96</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash Flows</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flows from operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,389</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,268</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,545</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flows from investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,701</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,762</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,551</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,797</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6,878</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,133</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,357</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,272</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,052</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,644</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Business acquisitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(71</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(228</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,118</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(54</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6,432</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Business dispositions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,166</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(255</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flows from financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,639</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,613</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,571</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,704</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,402</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Repurchase of common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,241</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net issuance of equity instruments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>29</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,819</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net (repayment)&nbsp;issuance of debt instruments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(432</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(47</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,140</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,541</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,047</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Financing activities of subsidiaries with third parties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(292</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(77</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(29</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">91</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash dividends paid on common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,169</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,195</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,108</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,029</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(999</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash dividends paid on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(84</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(86</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(85</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(61</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(43</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash dividends paid by subsidiaries to non-controlling
interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(293</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(169</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(179</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(172</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(468</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash provided by (used in) discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,087</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,332</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Ratios</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Free cash flow</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>708</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(574</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital intensity (%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>17.7</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">19.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">19.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">18.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">21.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flow per share (dollars)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.62</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.06</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flow yield (%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>7.4</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.6</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Share Information</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average number of common shares (millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>861.4</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">924.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">920.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">847.9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common shares outstanding at end of year (millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>807.6</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">927.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">925.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">924.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">915.9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Market capitalization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>25,359</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,103</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends declared per common share (dollars)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1.32</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Book value per share (dollars)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>14.48</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total dividends declared on common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,132</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,222</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,110</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,105</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,031</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total dividends declared on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(70</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(64</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(59</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Market price per common share (dollars)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">High</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>32.92</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36.87</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Low</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>25.56</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Close</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>31.40</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Ratios</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common dividend yield (%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>4.6</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.9</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common dividend payout ratio (%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>60.4</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">63.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">72.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">59.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">42.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Price to earnings ratio (times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13.96</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.71</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Price to book ratio (times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.17</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Price to cash flow ratio (times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>11.98</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26.89</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other Data</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of employees (thousands) <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>54</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(1) <I>The number of employees for 2004 excludes virtually all employees who left under
the voluntary departure program of 2004.</I>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ANNUAL OPERATIONAL INFORMATION
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows selected data on operations from 2004 to 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Wireline</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Local network access services (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,056</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,905</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long distance conversation minutes (millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>18,222</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,070</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long distance average revenue per minute (cents)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9.3</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Data</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">High-speed Internet net activations (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>267</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">High-speed Internet subscribers (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,462</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,808</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dial-up Internet subscribers (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>511</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">743</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Wireless</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cellular and PCS net activations (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>432</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">513</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cellular and PCS subscribers (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,873</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,925</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average revenue per unit ($/month)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>51</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Churn (%) (average per month)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>1.5</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of acquisition ($/subscriber)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>419</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">411</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paging subscribers (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>281</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">427</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Video</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Video net activations (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>93</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Video subscribers (thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,820</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,503</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average revenue per subscriber ($/month)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>54</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Churn (%) (average per month)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>1.0</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.9</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">14 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">QUARTERLY FINANCIAL INFORMATION
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows selected consolidated financial data by quarter for 2006 and 2005.
This quarterly information is unaudited but has been prepared on the same basis as the annual
consolidated financial statements. We discuss the factors that caused our results to vary over the
past eight quarters throughout this MD&#038;A.
</DIV>

<DIV align="center">
<TABLE style="font-size: 7pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="18" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19" style="border-bottom: 1px solid #000000">2005<B></B></TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">YEAR</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Q4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Q3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Q2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Q1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">YEAR</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Q4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Q3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Q2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Q1</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,713</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,547</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,422</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,388</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,356</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,290</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">EBITDA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,329</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,773</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,840</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,875</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,841</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,817</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,821</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,129</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(797</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(786</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(790</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(756</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,061</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(776</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(774</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(763</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(748</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net benefit plans cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(513</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(125</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(118</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(134</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(136</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(359</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(59</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(103</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(99</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(98</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(355</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(91</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(126</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(50</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(88</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(55</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(24</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(31</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>760</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>810</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>901</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>861</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">881</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">909</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">980</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,891</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>717</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>324</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>444</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>406</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">459</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(22</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>50</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>88</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>717</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>302</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>494</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>494</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">491</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings applicable to common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,937</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>699</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>285</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>476</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>477</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Included in net earnings:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net gains on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>419</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>410</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>106</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(11</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>35</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>80</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(222</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(66</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(71</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(27</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(58</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(37</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cost incurred to form Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(42</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(28</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(14</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings per common share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Continuing operations &#151; basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.12</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.84</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.39</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.47</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.42</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Continuing operations &#151; diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.12</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.84</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.39</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.47</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.42</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings &#151; basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.84</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.36</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.53</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.52</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings &#151; diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.84</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.36</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.53</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.52</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average number of common shares
outstanding (millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>861.4</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>811.6</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>818.8</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>896.4</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>920.5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">927.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">927.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926.2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Financial Results Analysis</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>This section provides detailed information and analysis about our performance in 2006 compared
with 2005. It focuses on our consolidated operating results and provides financial information for
each of our operating segments.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CONSOLIDATED ANALYSIS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">% CHANGE</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,713</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.6</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(10,384</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10,371</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.1</TD>
    <TD nowrap>%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EBITDA</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,329</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,129</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,061</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2.2</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net benefit plans cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(513</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(359</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(42.9</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(355</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(55</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/M</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11.4</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other (expense)&nbsp;income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(176</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/M</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(952</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(949</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.3</TD>
    <TD nowrap>%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pre-tax earnings from
continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,204</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22.3</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(85</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(803</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">89.4</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(228</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(201</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13.4</TD>
    <TD nowrap>%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing
operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,891</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8.7</TD>
    <TD nowrap>%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(70</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings applicable
to common shares</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,937</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.4</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EPS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>N/M: not meaningful</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Operating Revenues
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514803.gif" alt="(BAR GRAPH)">

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Total operating revenues at BCE increased to $17,713&nbsp;million in 2006, 0.6% higher than 2005.
This reflected higher revenues at Bell Canada, partially offset by lower revenues in our Other BCE
segment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues at Bell Canada increased 0.7% year over year to $17,348&nbsp;million. This was driven
primarily by:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;higher ARPU and an increased number of wireless, high-speed Internet and video
customers in our Residential segment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;solid wireless and ICT growth in our Business segment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;increased revenues from Internet, data and IT services at Bell Aliant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our growth services portfolio (comprised of wireless, video, high-speed Internet and ICT
solutions), which grew by about 11% this year, now represents a majority of Bell Canada&#146;s revenues,
accounting for 51% of the total at the end of 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The positive contribution of these factors to our top-line results more than compensated for
the continued erosion of traditional wireline services revenues from higher residential local line
losses and market pricing pressures in our Business segment, softer wholesale revenues, and the
impact of regulatory decisions. In total, these CRTC-mandated rulings adversely affected Bell
Canada&#146;s revenues in 2006 by approximately $61&nbsp;million, reflecting a reduction in local rates
associated with the Price Caps deferral account, a reduction in the rates we charge for switching
and aggregation services to long distance service providers, and a reduction in the fees we charge
to competitive local service providers for co-location in Bell Canada&#146;s switching offices. In
addition, our results for 2005 included revenues from a number of non-recurring sales which
negatively affected revenue growth in 2006. These items included the sale of customer
contracts in our Enterprise unit related to legacy point-of-sale systems, fibre and access
capacity sales in our Wholesale unit, the sale of U.S. conferencing solutions contracts in our SMB
unit, the early termination of a cross-border facilities contract and the recognition of deferred
revenues related to unused prepaid minutes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>2007 Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are targeting continued revenue growth at Bell Canada in 2007, as increases in revenue from
our growth services should more than offset further erosion of our legacy wireline business. Growth
services should represent a larger majority of Bell Canada revenues by the end of the year. Revenue
growth is expected to be fuelled by further expansion of our wireless, video and high-speed
Internet subscriber bases in combination with higher ARPU for each of these services, as well as by
growth in our ICT and VCIO services in our Enterprise and SMB units. We also intend to continue to
de-emphasize onetime hardware and equipment sales within our Business segment in favour of
recurring revenue streams from managed service contracts. Although we expect a negative impact on
revenues from NAS erosion and the continuing migration of traffic to IP-based networks and
services, we anticipate an improvement in the year-over-year decline in legacy wireline revenues,
mainly as a result of the expected stabilization in our residential local lines losses and
strategic pricing initiatives in our Business segment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">16 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>



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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See <I>Segmented Analysis </I>for a discussion of operating revenues on a segmented basis, and
<I>Product Line Analysis </I>for a discussion of operating revenues on a product line basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Operating Income
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514804.gif" alt="(BAR GRAPH)">

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Operating income for BCE was $3,332&nbsp;million in 2006, down 11.4% from $3,759&nbsp;million in 2005.
Similarly, Bell Canada&#146;s operating income decreased 10.7% in 2006 to $3,353&nbsp;million from $3,755
million in the previous year. The year-over-year decreases were due largely to restructuring and
other items associated with employee departures at Bell Canada, the relocation of employees and
closing of real estate facilities related to a reduced workforce, transaction costs from the
formation of Bell Aliant, and costs incurred under a proposal to reorganize the company into an
income trust and to simplify the corporate structure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating income before restructuring and other items<SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP>in 2006 was $3,687&nbsp;million
and $3,685&nbsp;million, respectively, for BCE and Bell Canada, representing decreases of 3.3% over the
previous year. The year over year reduction in operating income before restructuring and other
items at both BCE and Bell Canada in 2006 resulted primarily from:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;continued erosion of our high-margin residential NAS wireline customer base
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;operating margin pressure from the transformation of our product mix toward growth
services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;higher wireless customer retention costs and marketing expenses
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;higher operating costs associated with an increased volume of connection and service
requests
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;higher operating expenses from various business acquisitions made over the past year
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;increased capital taxes
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;higher net benefit plans cost and amortization expense.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These factors were partly offset by:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;increased cost savings from supply chain and process improvement initiatives
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;lower total wireless and video subscriber acquisition costs
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;lower labour costs
resulting mainly from employee workforce reductions and outsourcing
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;the non-recurrence of
costs associated with restoring service levels in 2005 following resolution of a labour dispute
with technicians in Ontario
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;higher operating revenues at Bell Canada.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See <I>Segmented Analysis </I>for a discussion of operating income on a segmented basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">EBITDA
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">EBITDA for BCE increased by 1.3% in 2006 to $7,329&nbsp;million from $7,234&nbsp;million in 2005,
reflecting improved performance at Bell Canada partly offset by lower EBITDA at Telesat due to
special compensation costs related to executive management changes and non-recurring revenues
generated in 2005 from the sale of network services.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EBITDA at Bell Canada increased to $7,289&nbsp;million, up 1.4% compared to $7,187&nbsp;million in 2005.
Higher EBITDA in 2006 reflected improved performance in our Business, Bell Aliant, and Other Bell
Canada segments, offset by a slight decrease in our Residential segment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In line with our objective for 2006 to keep EBITDA margins stable year over year as we
continued to transform the company into an IP-based growth services company, we increased EBITDA
margin at both BCE and Bell Canada by 0.3&nbsp;percentage points to 41.4% and 42.0%, respectively. The
improvement in margins reflected higher revenues and a significant step-up in savings from our cost
reduction program, which more than offset the negative impact of the loss of high-margin legacy
voice and data revenues across all our segments. Lower labour costs achieved through workforce
reductions and other productivity initiatives such as the outsourcing of call centre functions,
resolution of residual service issues related to a labour dispute with our technicians in Ontario
last year, and lower subscriber acquisition costs in our residential growth services also contributed towards maintaining relatively
stable EBITDA margins year over year. These lower costs were partly offset by a number of cost
increases during the year, including higher wireless customer retention costs and marketing
expenses, higher capital taxes, and higher operating expenses from various business acquisitions
made in 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wireless EBITDA for 2006 increased by 17.4% to $1,535&nbsp;million from $1,307&nbsp;million in the
previous year, driven primarily by revenue growth of 13.2% and reduced call centre costs. These
factors contributed to wireless EBITDA margin of 42.8% for the year, representing a 1.6&nbsp;percentage
point improvement over 2005
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 3%; text-indent: -3%"><I>(1)&nbsp;&nbsp;Operating income before restructuring and other items is a non-GAAP financial measure.
See </I>Non-GAAP Financial Measures &#151; Operating income before restructuring and other items <I>in this
MD&#038;A for more details including a reconciliation to the most comparable GAAP financial measure.</I>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">when customer service issues related to our billing system conversion had a negative impact on
our financial results, particularly during the first three months of the year. The year-over-year
EBITDA margin improvement was partly offset by higher customer retention and handset upgrade costs,
an increase in total subscriber acquisition costs and the recognition in 2005 of deferred revenues
related to unused prepaid minutes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wireless cost of acquisition (COA)&nbsp;increased 3.2% to $419 per gross activation in 2006 from
$406 per gross activation in 2005. Higher COA was due primarily to increased marketing expenses
associated with our Frank &#038; Gordon campaign and the market repositioning of Solo Mobile, higher
sales commissions from a focus on acquiring higher-value subscribers, as well as to a lower number
of total gross activations year over year. These impacts were largely offset by decreased handset
subsidies stemming from volume rebates and rate reductions received from handset manufacturers,
pricing discipline despite intense competition, and a higher number of prepaid gross activations
year over year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Video EBITDA increased significantly in 2006 to $181&nbsp;million from $45&nbsp;million in 2005. The
year-over-year improvement reflected strong double-digit revenue growth brought about by the
combined impact of a $4 increase in monthly ARPU and a 5.4% increase in the total number of
customers, as well as significantly lower subscriber acquisition costs resulting from fewer gross
activations and the favourable impact of a higher number of STB rentals. Lower call centre expenses
arising from reduced average call handling times and outsourcing also contributed to the
improvement in EBITDA.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>2007 Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are targeting an increase in EBITDA at Bell Canada for 2007, despite the ongoing shift in
our revenue mix from traditional wireline services to growth services. The increase is expected to
result from improving gross margins for our growth services, lower year-over-year declines in local
and access, long distance and legacy data revenues, as well as to ongoing cost savings from new
supply chain and procurement initiatives, productivity improvements, and organizational
transformation. We expect to reach an important inflection point in our business mix transition by
the end of 2007 when the incremental EBITDA contribution from wireless, video, broadband and ICT
services should begin to outpace the slowing decline in our legacy business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Amortization Expense
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The amount of our amortization expense in any year is affected by:</I>
</DIV>




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>how much we invested in new capital assets in previous years</I></TD>
</TR>

</TABLE>
</DIV>



<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>how many assets we retired during the year</I></TD>
</TR>

</TABLE>
</DIV>




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>changes in accounting rules and estimates.</I></TD>
</TR>

</TABLE>
</DIV><DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Each year, we review our estimate of the useful life of our capital assets.</I>
</DIV>







<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization expense of $3,129&nbsp;million in 2006 represents an increase of $68&nbsp;million or 2.2%
compared to $3,061&nbsp;million in 2005. This was a result of an increase in our capital asset base from
higher investment in the growth areas of the business, as well as capital spending that continues
to be higher than asset retirements, partly offset by a slight increase in the average life of
capital assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Net Benefit Plans Cost
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The amount of the net benefit plans cost in a year mainly depends on:</I>
</DIV>




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>the return on pension plan assets that we expect to be generated during the year &#151;
the lower the return, the higher the cost</I></TD>
</TR>

</TABLE>
</DIV>



<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>the present value of future pension benefit payments to employees &#151; the lower the
present value, the lower the cost</I></TD>
</TR>

</TABLE>
</DIV>




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD colspan="3" width="1%" align="left"><B>&#149;</B> &nbsp;&nbsp;&nbsp;<I>actuarial gain (loss) &#151; the difference between the actual funded status of our
pension plans and the amount calculated using our accounting assumptions. We amortize this into earnings over time.</I></TD>
</TR>

</TABLE>
</DIV>





<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD colspan="3" width="1%" align="left"><B>&#149;</B> &nbsp;&nbsp;&nbsp;<I>new actuarial valuations of which one was completed in June&nbsp;2006 for our defined benefit
pension plans (see </I>Liquidity <I>within the </I>Financial and Capital Management <I>section).</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The net benefit plans cost of $513&nbsp;million in 2006 represents an increase of $154&nbsp;million or
43% compared to $359&nbsp;million in 2005. The increase resulted mainly from:
</DIV>







<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD colspan="3" width="1%" align="left"><B>&#149;</B> &nbsp;&nbsp;&nbsp;<I>a reduction in the discount rate from 6.2% in 2005 to an average of 5.4% in 2006,
which increased the cost of our pension plan liabilities and, therefore, net benefit plans cost</I></TD>
</TR>

</TABLE>
</DIV>



<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>a $44&nbsp;million curtailment gain in 2005 associated with the phase-out, over three
years, of a discretionary allowance program.</I></TD>
</TR>

</TABLE>
</DIV>








<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net benefit plans cost is expected to decrease in 2007, mainly as a result of improved returns
on plan assets in 2006 and changes to benefit plans. This is partly offset by a further reduction
in the discount rate from an average of 5.4% for 2006 to 5.3% for 2007 that results in an increase
in our accrued benefit obligation under the pension plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">18 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Restructuring and Other Items
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>This category includes various income and expenses that are not directly related to the
operating revenues generated during the year. Examples are costs related to workforce reduction
initiatives and asset write-downs.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded restructuring charges and other items of $355&nbsp;million in 2006. These included:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;charges of $93&nbsp;million related to restructuring initiatives for the involuntary
departure of approximately 1,810 employees
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;charges of $72&nbsp;million for relocating employees and closing real estate facilities
that are no longer needed because of the reduction in the workforce
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;other charges of $190&nbsp;million consisting mainly of costs related to the formation of
Bell Aliant, costs we incurred for the Bell income trust initiative and the simplification of our
corporate structure. The costs associated with the formation of Bell Aliant consisted mainly of
investment banking, professional and consulting fees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Other (Expense) Income
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Other (expense)&nbsp;income includes (expense)&nbsp;income that we (incur)&nbsp;receive from activities that
are not part of our main business operations, such as:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>net gains on investments, including gains or losses when we dispose of, write down
or reduce our ownership in investments</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>foreign currency gains (losses)</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>interest income on cash and cash equivalents</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>other miscellaneous income or expense.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expense of $176&nbsp;million in 2006 represented a decrease of $204&nbsp;million compared to
other income of $28&nbsp;million in 2005. This decrease resulted mainly from:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;a $148&nbsp;million charge for premium costs on early redemption of Bell Aliant debt,
$122&nbsp;million of which was recorded as a result of the formation of Bell Aliant
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;a $39&nbsp;million dilution gain in the second quarter of 2005 relating to our
interest in TerreStar Networks Inc., a mobile satellite services company
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;a $36&nbsp;million loss as a result of our decision to exit a line of business
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;a $26&nbsp;million loss realized on the exercise of swaptions issued by Bell Aliant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This was partly offset by a $9&nbsp;million gain on the acquisition of Nortel Networks Corporation
(Nortel) shares by the Bell Canada pension fund and a charge of $33&nbsp;million in 2005 related to the
tax loss monetization program between Bell Canada and Bell Canada International Inc. (BCI).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Interest Expense
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Interest expense of $952&nbsp;million in 2006 increased by $3&nbsp;million or 0.3% compared to $949
million in 2005. This was a result of higher average debt levels offset by lower average interest
expense from the refinancing of debt at lower rates.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Income Taxes
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Income taxes of $85&nbsp;million in 2006 decreased by $718&nbsp;million or 89% compared to $803&nbsp;million
in 2005. This was due mainly to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;the recognition of a future tax asset totalling $434&nbsp;million in respect of approximately
$2,341&nbsp;million of previously unrecognized capital loss carryforwards. These tax losses have been
recognized as a result of the pending sale of Telesat.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;lower pre-tax earnings
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;the impact of the non-taxable portion of Bell Aliant&#146;s income
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;favourable tax audit settlements in 2006 and other adjustments to our estimated future
tax liability including reductions in income taxes resulting from the decrease in corporate federal
income tax rates and the elimination of the large corporation tax stemming from the 2006 federal
budget.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This decrease was partly offset by $99&nbsp;million of savings in 2005 resulting from the loss
monetization program between Bell Canada and BCI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result, the effective tax rate decreased in 2006 to 3.9% compared to 28.3% in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Non-Controlling Interest
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The non-controlling interest in the statements of operations reflects the percentage ownership
of a subsidiary owned by others multiplied by the amount of the subsidiary&#146;s after-tax earnings.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest of $228&nbsp;million in 2006 increased by $27&nbsp;million or 13.4% compared to
$201&nbsp;million in 2005. This was mainly due to our decreased ownership interest upon the formation of
Bell Aliant, partly offset by the non-controlling interest in the premium costs incurred by Bell
Aliant on the early redemption of long-term debt and by transaction costs associated with Bell
Aliant.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 19
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Discontinued Operations

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;30, 2006, we reduced our interest in CTVglobemedia to 20% from 68.5%, as previously
announced on December&nbsp;2, 2005. In September&nbsp;2006, CTVglobemedia completed its takeover bid for CHUM
Limited (CHUM). As a result of the transaction our interest in CTVglobemedia was reduced to 15%.
Our remaining investment in CTVglobemedia is accounted for using the cost method and is presented
as a discontinued operation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The net gain from discontinued operations of $116&nbsp;million in 2006 relates to our gain on
disposition of CGI of $79&nbsp;million, a gain of $52&nbsp;million realized on the return of capital from
BCI, a $7&nbsp;million gain on acquisition of our remaining CGI shares by the Bell Canada pension fund,
and operating income at CTVglobemedia. This was partly offset by a write-down of $17&nbsp;million on our
remaining investment in CGI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The net gain from discontinued operations of $127&nbsp;million in 2005 relates mainly to our share
of both CGI and CTVglobemedia&#146;s operating income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Net Earnings and Earnings per Share (EPS)
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514805.gif" alt="(BAR GRAPH)">

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net earnings applicable to common shares were $1,937&nbsp;million, or $2.25 per common share, in
2006, 2.4% higher than net earnings of $1,891&nbsp;million, or $2.04 per common share, in 2005. Included
in net earnings this year was a charge of $222&nbsp;million from restructuring and other items, net
gains on investments of $525&nbsp;million, and costs incurred to form Bell Aliant of $42&nbsp;million,
compared to a net charge of $10&nbsp;million last year. Net gains on investments in 2006 included the
recognition of a future tax asset of $434&nbsp;million representing the tax-effected amount of
approximately $2,341&nbsp;million of previously unrecognized capital loss carryforwards that will be
realized due to the anticipated gain on the sale of Telesat. Net earnings before restructuring and
other items, net gains on investments, and costs incurred to form Bell Aliant<SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP>of
$1,676&nbsp;million, or $1.95 per common share, were down $225&nbsp;million, or $0.10 per share. The decrease
was a result of higher amortization expense, higher net benefit plans cost and discontinued
operations, partly offset by improved EBITDA performance and the increase in EPS from the normal
course issuer bid (NCIB)&nbsp;share repurchase program. The decrease was offset further by the
favourable impact on EPS of the share consolidation associated with the distribution of a 28.8%
interest in Bell Aliant to BCE Inc. common shareholders and by lower income tax expense.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SEGMENTED ANALYSIS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Starting in the third quarter of 2006, our segment reporting reflects the formation of Bell
Aliant and it is reported as a separate segment. Since Bell Aliant includes the operations of Bell
Canada&#146;s former regional wireline operations and Bell Nordiq, the results of our other segments
have been restated to reflect the sale of these operations. Additionally, the results of our other
segments have been restated to reflect the sale to Bell Canada of the Aliant wireless business and
the DownEast Mobility Limited (DownEast) retail stores, which are now reported in our Residential
and Business segments.
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt;margin-left: 3%; text-indent: -3%"><I>(1)&nbsp;Net earnings before restructuring and other items, net gains on investments, and costs
incurred to form Bell Aliant is a non-GAAP financial measure. See </I>Non-GAAP Financial Measures &#151;
Net earnings before restructuring and other items, net gains on investments, and costs incurred to
form Bell Aliant <I>in this MD&#038;A for more details including a reconciliation to the most comparable
GAAP financial measure.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">20 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514806.gif" alt="(PIE CHART)">

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">% CHANGE</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,099</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.2</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,057</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,966</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,358</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,592</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,651</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3.6  </TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Inter-segment eliminations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(758</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(719</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5.4 </TD>
    <TD nowrap>%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,348</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.7      </TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other BCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>535</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.6</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Inter-segment eliminations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(170</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(167</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1.8   </TD>
    <TD nowrap>%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total operating revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,713</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.6 </TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">% CHANGE</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,649</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6.9</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>811</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">863</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6.0</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>777</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.2 </TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(67.0</TD>
    <TD nowrap>%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,353</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10.7</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other BCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(21</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/M</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11.4</TD>
    <TD nowrap>%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 3pt"><I>N/M: Not meaningful</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Residential Segment

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Residential Revenues</I>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514807.gif" alt="(BAR GRAPH)">

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Residential revenues increased 1.2% to $7,099&nbsp;million in 2006, compared to $7,016&nbsp;million in
2005. Wireless, video and data contributed 3.3%, 2.5% and 1.3%, respectively, to overall
Residential revenue growth in 2006. The increase this year reflected a higher number of wireless,
video and high-speed Internet subscribers combined with significantly higher ARPU across all these
growth services. The revenue performance of our growth services was largely offset by negative
contributions of 3.8% from local and access services, 1.9% from long distance and 0.2% from
terminal sales and other revenues. Lower wireline (local and access and long distance) revenues
were due to higher NAS losses in 2006 brought about by increased cable telephony competition,
ongoing wireless long distance and VoIP substitution, the impact of CRTC-mandated local rate
reductions, as well as continued aggressive price competition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Wireline
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Local and access, which represents the largest proportion of our Residential segment revenues,
declined in 2006, due mainly to ongoing NAS erosion, CRTC-required price reductions for basic
service and related SmartTouch value-added service features, and a decrease in wireline maintenance
plan revenues. NAS decreased in 2006 primarily as a result of losses to cable companies and CLECs,
wireline to wireless substitution, as well as continued growth in high-speed Internet access that
reduces the need for second telephone lines. The annualized NAS erosion rate increased in 2006 as
the major cable companies operating in our Ontario and Qu&#233;bec markets continued to expand their
service footprints and to vigorously market low-priced cable telephony offerings through bundled
offers with other services.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In line with NAS erosion, long distance revenues decreased in 2006 compared to the previous
year, reflecting lower average revenue per minute (ARPM), a decrease in the total volume of
conversation minutes, and lower prepaid calling card sales. However, prudent price increases,
including an increase in our network access charge in the second quarter of 2006 from $2.95 per
month to $4.50 per month, higher overseas and calling card per-minute rates, as well as increases
in some plan fees has enabled us to moderate the loss of residential long distance revenues in 2006
and to slow down its annual rate of erosion. Lower ARPM reflected ongoing competition from
non-traditional long distance providers, increased adoption of our Block of Time (BOT)&nbsp;minute
plans, and a lower volume of higher-priced overseas minutes. Overall minutes in 2006 declined year
over year, as usage gains stemming from our BOT plans
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 21
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">were more than offset by the impact of higher NAS erosion and by losses of domestic and
overseas minutes to alternative long distance service providers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For further information about our wireline business, please see <I>Local and Access </I>and <I>Long
Distance </I>within our <I>Product Line Analysis</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Wireless
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Residential wireless revenues increased in 2006, mainly as a result of a higher average number
of customers, price increases over the past year for certain services and features, a shift in the
subscriber mix towards higher-value rate plans, and the increased number of Solo and Virgin Mobile
customers, which have higher-than-average ARPU in our prepaid subscriber base. Higher data usage
fuelled by the expansion of our high-speed EVDO mobile data network, increased adoption of &#145;Fuel
Me&#146; bundles, text messaging, mobile browsing and gaming, all of which have been facilitated by the
availability of handsets with enhanced MP3 download and video streaming capabilities, also
contributed to the improvement in Residential wireless revenues this year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For further information about our wireless business, please see <I>Wireless </I>within our <I>Product
Line Analysis</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Data
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Higher Residential data revenues in 2006 reflected high-speed Internet subscriber growth and
increased ARPU. The improvement in ARPU was driven by a number of price increases over the past
year, a reduction in customer credits, a 26% increase in revenues from our Sympatico.MSN.ca web
portal and higher subscriptions to value-added services such as security services and home
networking. The year-over-year increase in residential data revenues was moderated by the impact of
discounts from promotional offers on our Basic and High Speed Edition products that have been
implemented to combat the intense competitive conditions in our Qu&#233;bec market. In the fourth
quarter of 2006, we implemented usage thresholds on all new high-speed acquisition offers in Qu&#233;bec
and Ontario, which should help to drive incremental revenue growth as new high-speed customers will
be charged $1.50 per gigabyte (GB)&nbsp;above 30 GB of usage. Sympatico customers also generated
approximately 168&nbsp;million video streams in 2006, a five-fold increase compared to the previous
year. The portal, which reaches approximately 87% of online Canadians, averaged 19.3&nbsp;million unique
visitors per month, reflecting an increase of 12% in 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For further information about our data business, please see <I>Data </I>within our <I>Product Line
Analysis</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Video
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">See discussion under <I>Product Line Analysis.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Residential Operating Income</I>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514808.gif" alt="(BAR GRAPH)">

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our Residential segment reported operating income of $1,649&nbsp;million, down 6.9% or $123&nbsp;million
from the previous year. The decrease was due primarily to a higher rate of decline in our
high-margin residential NAS wireline customer base, increased customer retention costs and
advertising expenses in our wireless unit, as well as increased amortization expense and net
benefit plans cost. These factors were moderated by higher revenues across all our growth services,
a decrease in total video subscriber acquisition expenses, lower call centre costs driven largely
by outsourcing of call volumes and an improvement in the first call resolution rate, as well as
cost savings from initiatives such as One Bill and reducing missed customer appointments for
wireline installations and repairs. The recovery from a labour dispute with technicians in Ontario
that negatively impacted operating expenses in the fourth quarter of 2005 also helped to offset the
decrease in operating income this year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Residential 2007 Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, we expect to benefit from a further decrease in contact centre costs, driven mostly by
an improvement in the first-call resolution rate, outsourcing, various call reduction initiatives
and an increase in our self-serve offer. This, along with increasing revenues from continued
subscriber base growth in wireless, video, and high-speed Internet, is expected to moderate the
adverse impact on Residential revenues of the ongoing erosion of our local and access and long
distance businesses. We believe that we will experience a sustained level of competition in 2007 as
cable operators maintain the intensity of their marketing efforts and further expand the footprint
for their low-priced cable telephony offerings in our incumbent territories. However, the potential for local telephone
deregulation in 2007 should provide
</DIV>


<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">22</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I></TD>
</TR>

</TABLE>
</DIV>
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</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">us with the ability to market in new ways. The quality and value of our video services, coupled
with the strength of Bell Canada&#146;s multi-product offering, is expected to support our ability to
compete effectively against the cable competitors across all products and services.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Business Segment
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Business Revenues</I>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514809.gif" alt="(BAR GRAPH)">

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Business segment revenues totalled $6,057&nbsp;million in 2006, representing a 1.5% increase over
the $5,966&nbsp;million reported in 2005. Our SMB and Bell West units accounted for 0.8% and 1.9% of the
total growth in Business segment revenues in 2006, offset partly by a negative contribution of 1.2%
from our Enterprise unit. The year-over-year improvement can be attributed mainly to increased ICT
and wireless revenues from SMB and Enterprise customers. Wireline access revenues also increased in
2006, reflecting stabilization in the rate of erosion in legacy connectivity services and the
impact of pricing initiatives implemented by our Enterprise and SMB units. These positive factors
were largely offset by declines in long distance and legacy data revenues as a result of ongoing
competitive pricing pressures and continued migration of customers&#146; voice and data traffic to our
IP-based systems. In addition, the positive impact on revenues in 2005 of non-recurring sales of
customer contracts related to legacy point-of-sale systems and our U.S. conferencing impacted
overall Business segment revenue growth in 2006 when similar sales did not occur.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Enterprise
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Enterprise revenues decreased in 2006 compared with 2005, mainly as a result of declines in
legacy data services and long distance revenues stemming from competitive price reductions and the
ongoing migration of our customers&#146; voice and data traffic to IP-based systems. The positive impact
on revenues in 2005 of the non-recurring sale of customer contracts related to legacy
point-of-sales systems also adversely affected year-over-year growth. In line with our increased
focus on profitable growth this year, we de-emphasized lower-margin hardware sales. Higher wireless
revenues, as well as increased IP-based connectivity and ICT revenues, partly offset the
year-over-year decrease in Enterprise revenues. ICT revenues grew by 3% in 2006, largely reflecting
increased sales from the acquisition of small specialized service companies over the past year to
enhance the breadth of our service offerings, and new contract wins primarily in the areas of
security solutions and wireless data.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We continued to experience solid demand for IP-based network solutions, particularly for IP
VPN services, as large Enterprise customers chose Bell Canada for their ICT needs. Our Enterprise
unit had a number of significant multi-year contract wins and renewals in 2006 totalling
approximately $2.5&nbsp;billion in value, which included:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp;&nbsp;Toronto-Dominion Bank Financial Group, to implement and manage a fully-outsourced
IP-based contact centre solution that will support over 6,300 agents in 94 locations
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp;&nbsp;RBC Financial Group, to convert their 1,300 branch offices from a legacy frame relay data
network to a consolidated IP-based multi protocol label switching (IP MPLS) network
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>
&nbsp;&nbsp;&nbsp;Desjardins Group, to provide ICT communications, payment and call centre services, as
well as a technological evolution plan to deploy IP technology to its approximate 1,500 retail
branch offices.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SMB
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Revenues generated from SMB customers increased in 2006 as higher data, wireless and local and
access revenues more than compensated for lower long distance and other revenues. Double-digit data
revenue growth was the result of strong ICT sales driven by increased penetration of VAS and
improved cross-selling opportunities made possible by companies acquired in the past few years to
enhance our VCIO strategy, as well as continued demand for high-speed Internet access service
connections. Although competition increased, total VAS/ VCIO revenues improved 24% in 2006. Local
and access revenues increased this year, despite continued local line losses to alternative
telephony providers, primarily as a result of the favourable impact of price increases for basic
local access and the success of our customer retention initiatives. Long distance revenues
decreased, owing mainly to lower minute volumes, higher local line losses, and the ongoing
weakening of our pay-phone business resulting from wireless and Internet substitution. The positive
impact of strategic product pricing helped to
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 23
</DIV>



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</DIV>
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">moderate the year-over-year decline in long distance revenues. Lower other revenues can be
attributed primarily to the sale of our U.S. conferencing solutions in the third quarter of 2005
and a decrease in legacy voice equipment sales.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Bell West
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell West continued to grow its business in 2006 mainly as a result of higher wireless revenues
brought about by improved wireless subscriber and ARPU growth, increased data revenues and
continued expansion of its Enterprise and SMB customer bases. Data revenue growth was generated by
increased broadband connectivity revenues from the sale of services related to the SuperNet (a
next-generation broadband access network in Alberta) and higher data equipment sales, partly offset
by a decrease in legacy data due to increased migration of customer traffic to IP-based systems.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Business Operating Income</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514810.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Business segment operating income decreased 6.0% to $811&nbsp;million in 2006 from $863&nbsp;million
in the previous year due to higher amortization expense and net benefit plans cost, as well as the
loss of higher-margin legacy wireline voice and data business both to IP substitution and the
competition. Higher revenues, cost savings from headcount reductions and other productivity
improvements, and a shift away from less profitable hardware equipment contracts mitigated the
negative year-over-year impacts on operating income.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our Enterprise unit, operating income declined in 2006, reflecting the impact of lower
revenues due to competitive pricing pressures in long distance and legacy data, margin erosion
from the ongoing shift in product mix towards IP-based services, a sale in 2005 related to
customer contracts for legacy point-of-sales systems, as well as higher net benefit plans cost.
These factors were offset partly by lower selling, general and administration expenses and a
decrease in labour costs driven primarily by workforce reductions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SMB operating income growth in 2006 was driven by higher revenues, cost savings from
workforce reduction, sales force realignment and outsourcing of call centre functions, as well as
other productivity improvements. Margin erosion associated with the shift in sales from legacy
wireline services to VAS/VCIO solutions, increased operating expenses from recent business
acquisitions, and higher net benefit plans cost moderated the year-over-year improvement in
operating income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell West recorded a lower operating loss this year, primarily as a result of improved gross
margins and operating cost reductions, despite increased amortization expense as the SuperNet was
in service for a full year. Our Bell West unit achieved a milestone in
2006. EBITDA was positive for the first time in its operating history.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Business </I>2007 <I>Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With a more intense focus on ICT/VCIO profitability in
2007, we intend to leverage the capacity and scale of our
Enterprise and SMB operations to take advantage of
market opportunities and to pull through connectivity
revenues. Our growth strategy will continue to be developed around leveraging the intelligent capabilities of our
IP-based network to serve more fully the business needs
of the Enterprise market in key ICT vertical markets
such as the government and financial services sectors,
and to continue raising awareness among our SMB
customers about the benefits of ICT solutions delivered
through a single point of contact with one service
provider. Our SMB unit has refined its VCIO strategy to
strengthen its position in the hosting market and to
place greater emphasis on leveraging its core traditional
connectivity business as a complement to its IT and VAS
product offerings. In 2007, we are targeting revenue
growth, which is expected to be driven by organic
growth in IP-based connectivity service and ICT revenues, further traction of our VCIO strategy in SMB, and
continued solid wireless performance. At the same time,
we will continue to pay close attention to managing the
competitive pressures in our legacy voice and data businesses, while transforming our operations to achieve
greater efficiencies and further productivity improvements in order to seek to improve margins. At Bell West,
the ongoing reorganization and streamlining of operations is expected to lead to the achievement of further
cost efficiencies in 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">24
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises
&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Bell Aliant Segment
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Bell Aliant Revenues</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514811.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Aliant segment revenues were $3,358&nbsp;million in 2006, reflecting an increase of $38
million or 1.1% compared to the previous year as growth in data (including Internet) and IT more
than offset declining revenues from local and access services and long distance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Local and access revenues decreased on a year-over-year basis in 2006. This resulted mainly
from a 2% decline in the NAS customer base resulting from competitive losses, the reduction of
second lines as dial-up Internet customers continued to migrate to high-speed services, and the
reduction in primary lines as customers adopted wireless and VoIP technologies. Long distance
revenue also decreased in the year, mainly as a result of lower per-minute toll prices and a
decline in overall minutes of usage due to competitive pressures and technology substitution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data revenues grew solidly in 2006 due largely to a significant increase in Internet revenues
attributable to year-over-year subscriber growth of 24%. Service area expansion, reduced levels of
promotional pricing in the residential market and increased adoption of enhanced services
contributed positively to Internet revenue growth in the year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Terminal sales and other revenues also increased this year compared with 2005. The
year-over-year improvement can be attributed mainly to growth in IT revenues that was driven by new
contracts for systems integration, application services and managed outsourcing resulting from our
focus on the key industry verticals within the enterprise market, as well as to expansion of
existing contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Bell Aliant Operating Income</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514812.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Operating income at Bell Aliant in 2006 increased 1.2% to $777&nbsp;million from $768&nbsp;million in
the previous year. Progress made with respect to expense management and productivity initiatives in
2006 was largely offset by higher costs incurred for consulting and professional fees, capital
taxes and other expenses related to the formation of Bell Aliant. Although restructuring and other
charges of $13&nbsp;million were included in operating income for 2006, these costs were more than
offset by a decline in depreciation and amortization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Bell Aliant 2007 Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, Bell Aliant plans to execute on two key strategic priorities to address the growing
competitive pressures in its marketplace. Firstly, Bell Aliant intends to provide superior customer
experience by delivering high-quality customer service, providing value through leading products
and services, and through strong community involvement. Secondly, it intends to drive operational
efficiency by aggressively managing its cost structure in order to grow distributable cash flow and
deliver incremental value to its unitholders. In addition, leveraging Bell Aliant&#146;s scale, access
to leading-edge technology and close collaboration with Bell Canada should contribute to further
improving operational effectiveness and reducing costs. Bell Aliant also intends to continue
exploring opportunities for further consolidation by acquiring other regional and rural operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Other Bell Canada Segment
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Other Bell Canada Revenues</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514813.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Other Bell Canada segment revenues decreased 3.6% to $1,592&nbsp;million in 2006, compared to
$1,651&nbsp;million in 2005. Despite higher wholesale demand for local access capacity in Western
Canada, the year-over-year decline in revenues was due mainly to the weaker performance of our
Wholesale unit as a result of continued pressure on long distance revenues from a reduction in
switched minute volumes and competitive pricing, lower rates on cross-border exchange traffic,
decreased data revenues
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 25
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">from customers migrating services onto their own network facilities, as well as a number of
non-recurring favourable impacts in 2005, which included:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;the early termination of a cross-border facilities
contract
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;fibre and access capacity sales
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;a contract to restore telecommunications service to the areas in the United States affected by Hurricane Katrina.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, a regulatory ruling related to rates we charge for switching and aggregation services
to long distance service providers and a ruling related to the fees we charge to competitive local
service providers for co-location in Bell Canada&#146;s switching offices had an adverse effect on
revenue growth this year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Other Bell Canada Operating Income</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514814.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Operating income for the Other Bell Canada segment was $116&nbsp;million in 2006, down from $352
million in 2005. The decrease was due entirely to restructuring and other charges incurred for:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;the involuntary departure of employees and the associated relocation of employees and closing of real estate
facilities no longer required as a result of our reduced
workforce
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;the formation of Bell Aliant
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;the formerly planned reorganization of the company into an income trust
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;the simplification of our corporate structure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Excluding restructuring and other items, operating income increased by 6.1% in 2006 to $434
million, reflecting lower cost of goods sold due to lower domestic and international long distance
traffic, a decreased volume of termination minutes stemming from reduced southbound traffic to the
United States, as well as other cost reductions directly related to our workforce reduction and
productivity initiatives. Lower revenues and higher amortization and net benefit plans cost partly
offset the year-over-year improvement in operating income.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Other BCE Segment
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Other BCE Revenues</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514815.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Other BCE segment revenues decreased slightly in 2006, down $3&nbsp;million to $535&nbsp;million
compared to the previous year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues from Telesat increased 0.8% to $479&nbsp;million in 2006 from $475&nbsp;million in the previous
year, due primarily to higher broadcast revenues, increased sales of its two-way broadband service
using the Ka-band of the Anik F2 satellite, and the improved performance of its Infosat subsidiary.
This was largely offset by non-recurring revenue on a sale in 2005 related to the installation and
maintenance of an interactive distance learning network and by reduced business activity in South
America.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;18, 2006, BCE Inc. announced the sale of Telesat for $3.42&nbsp;billion to a new
company formed by PSP Investments and Loral. The sale is subject to regulatory approval both in
Canada and the United States, and other closing conditions including the absence of a material
adverse change affecting Telesat&#146;s business. The transaction is expected to close in mid-2007.
Some other notable developments at Telesat included:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 00px; text-indent: -00px">&#149;&nbsp;&nbsp;&nbsp; an announcement on January&nbsp;17, 2006 of plans to
build and launch Nimiq 4, a new direct broadcast satellite that will carry a wide range of digital television services and enable Bell ExpressVu to enhance advanced
services such as HD television, specialty channels and
foreign language programming
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;the placement into service on February&nbsp;17, 2006 of the
Nimiq 4-interim, a satellite leased by Telesat providing
further capacity and backup capability for Bell ExpressVu
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;an announcement on January&nbsp;4, 2007 of plans to build
and launch Nimiq 5, the latest in Telesat&#146;s line of satellites carrying digital television signals, scheduled for
launch in 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">26 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Other BCE Operating Income</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514816.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Operating income for the Other BCE segment in 2006 decreased to negative $21
million from $4&nbsp;million in 2005, due mainly to lower operating income at Telesat and higher
corporate expenses at BCE Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Telesat&#146;s operating income in 2006 was $142&nbsp;million, representing a 9.6% decline when
compared with operating income of $157&nbsp;million in the previous year. The year-over-year
decrease reflected special compensation costs related to senior executive changes made in
September&nbsp;2006 and higher amortization expense partly offset by lower cost of network equipment
sales. Higher revenues partly offset the decrease in operating income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">PRODUCT LINE ANALYSIS
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514817.gif" alt="(PIE CHART)">
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">REVENUES</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">% CHANGE</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Local and access
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="font-weight: bold">5,212</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5,465</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">(4.6</TD>
    <TD nowrap valign="top">%)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Long distance
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="font-weight: bold">1,798</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,055</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">(12.5</TD>
    <TD nowrap valign="top">%)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wireless
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="font-weight: bold">3,491</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3,085</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13.2</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Data
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="font-weight: bold">4,120</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4,016</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.6</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Video
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="font-weight: bold">1,150</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">976</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17.8</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Terminal sales and other
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="font-weight: bold">1,577</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,637</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">(3.7</TD>
    <TD nowrap valign="top">%)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Total
Bell Canada</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>17,348</B></TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17,234</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0.7</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" valign="top" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Local and Access
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514818.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Local and access revenues decreased by 4.6% in 2006 to $5,212&nbsp;million compared to $5,465
million in 2005. The year-over-year decline was due mainly to higher NAS erosion and the
consequent loss of SmartTouch features revenue, as well as to lower revenue from wireline
maintenance plans. Local and access revenues were also negatively impacted in 2006 by a number of
CRTC decisions, including a mandated reduction in local access rates associated with the Price
Caps deferral account that took effect on June&nbsp;1, 2006 and a mandated reduction in rates we charge
for switching and aggregation services to long distance service providers. These regulatory
rulings reduced local and access revenues by approximately $51&nbsp;million in 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NAS in service declined by 525,000, or 4.2%, since the beginning of 2006 as a result of
increased competition from cable operators for local telephone service, continuing losses to CLECs,
and wireline to wireless substitution. The rate of NAS erosion for 2006 reflects a higher level of
local line losses than in 2005 at both Bell Canada and Bell Aliant, as the major cable operators in
our incumbent territories maintained their intensive marketing efforts and further expanded the
footprint of their low-priced local telephony offerings across most
of our Ontario and Qu&#233;bec
markets. This was partly offset by higher wholesale demand for local access lines in Western Canada
and an increase in customer winbacks following the CRTC&#146;s decision in April&nbsp;2006 to reduce the
waiting time before we can contact lost customers from one year to three months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the CRTC&#146;s regulatory restrictions continue to place restrictions on our local and
access business with respect to bundling and packaging of local services with other non-regulated
services and limitations on customer winback promotions, there was a positive development on
December&nbsp;11, 2006, when the federal government put forth a proposal to accelerate deregulation of
retail telephone prices by implementing new forbearance criteria based on either a competitive
facilities-based or competition-based test. Under the new
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">proposal, restrictions on customer winbacks and other promotions would be ended immediately. In
addition, the CRTC would consider each forbearance application on a priority basis and would make a
decision within 120&nbsp;days. The company believes that the federal government proposal could be
adopted as early as the end of the first quarter of 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">2007 <I>Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, we expect wireline competition to continue, particularly in the Residential market
and we are targeting an increase in the number of customer winbacks. Although overall NAS in
service will continue to decrease in 2007 as a result of ongoing cable telephony competition and
an anticipated slowdown in wholesale demand for local loops, we are targeting a stabilization of
residential line losses in 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Long Distance
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514819.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Long distance revenues were $1,798&nbsp;million in 2006, reflecting a year-over-year decrease of
12.5% compared to 2005. Lower long distance revenues affected all Bell Canada segments, due mainly
to the impact of escalating wireless substitution and continued NAS erosion. The year-over-year
decrease was offset partly by an increase in the network charges for Residential and SMB customers
implemented on April&nbsp;15, 2006, as well as by higher overseas and calling card per-minute rates.
Total minute volumes decreased 0.1% in 2006 to 18,222&nbsp;million conversation minutes from 18,243
million in 2005. As a result, ARPM decreased by $0.01 during the year to $0.093, reflecting
competitive pricing pressures in all our markets and a decline in both domestic and overseas minute
volumes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">2007 <I>Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We expect that the long distance business will remain fiercely competitive in 2007, due to
aggressive marketing by the cable operators of their expanded footprint for low-priced cable
telephony service and their ongoing strategy of selling multi-product bundles at discounted rates.
We will seek to minimize the decline in long distance revenues through smart pricing actions and
targeted marketing of existing long distance services. We also anticipate continued pressure in
business long distance revenues in 2007 due to wireless and competitive substitution, as well as to
competitive pricing conditions in our Enterprise and Wholesale markets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Wireless
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514820.gif" alt="(BAR CHART)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514821.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Gross wireless activations decreased 2.1% in 2006 to 1,440,000, down from a record performance of
1,471,000 gross activations in 2005, due to lower postpaid gross activations that were partly
offset by higher prepaid gross activations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Postpaid rate plans accounted for 65% or 933,000 of the total gross wireless activations in
2006, representing a 9% decline over the 1,025,000 achieved in 2005. This result reflected the
impact of aggressive acquisition offers throughout the year from our competitors that featured
heavily discounted handsets and rate plans, as well as weaker sales during the 2006 holiday season
compared to the same period in 2005 due largely to a decrease in retail traffic in our sales
channels. In addition, subscriber growth was affected by lower churn industry-wide, mostly in the
second half of the year. The relatively fewer number of customers switching service providers was
expected as our competitors locked customers into long-term contracts with handset upgrades
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">28 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and attractive rate-plan discounts ahead of the implementation of wireless number
portability in March&nbsp;2007. The 14% year-over-year growth in prepaid gross activations, which
comprised the remaining 35% or 507,000 gross activations in 2006, was driven by the strong
performance of the Solo and Virgin Mobile brands, particularly in the youth segment of the market.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our postpaid churn rate improved to 1.1% in 2006 from 1.4% in 2005, reflecting the success of
our retention activities and the strength of our value proposition, despite competitive market
pressures and tighter policies on the granting of customer discounts and hardware upgrades. Our
postpaid churn rate in 2005 was adversely affected by the cancellation of non-paying customer
accounts stemming from the residual impacts associated with our billing system conversion. Prepaid
churn in 2006 increased to 2.6% from 1.9% in the previous year, due mainly to the deactivation of a
higher number of inactive Bell Mobility customer accounts and the impact of certain pricing actions
taken in 2005. On a combined basis, as a result of lower postpaid churn, our blended churn rate
decreased to 1.5% in 2006 from 1.6% in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of a higher prepaid churn rate, our total wireless net activations decreased to
432,000 in 2006 from 516,000 in 2005, despite higher postpaid net activations. For the year, 71% or
305,000 of our total new net activations subscribed to postpaid rate plans, while the remaining 29%
or 127,000 subscribers chose prepaid service. This compares with a postpaid-to-prepaid net
activations subscriber mix of 56%-to-44% in 2005. At December&nbsp;31, 2006, our cellular and PCS
subscriber base totalled 5,873,000, representing a 7.9% increase over the past year. Postpaid rate
plans represented 74% of our total subscriber base at the end of 2006, unchanged compared to the
end of 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wireless revenues grew 13.2%, or $406&nbsp;million, to $3,491&nbsp;million in 2006, compared with 2005,
reflecting the combined impact of increased ARPU and a higher average number of customers in our
subscriber base.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Postpaid ARPU increased by $3&nbsp;year over year to reach $64 per month. The significant
improvement was achieved primarily as a result of:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;a shift in our subscriber acquisition mix toward higher
ARPU postpaid customers, reflecting higher penetration
of BlackBerry customers and other heavy users subscribing to higher-priced rate plans
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;the positive impact of price increases for certain services and features over the past year, including an increase in Bell Mobility&#146;s system access fee from $6.95 to $8.95 per month
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;an overall increase in minutes of usage
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149; &nbsp;&nbsp;&nbsp;strong growth in data usage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Higher data usage reflected the continued growth of text and multimedia messaging services,
wireless Internet access, downloadable ringtones, music and games, as well as the continued
popularity of our &#145;Fuel Me&#146; bundled data offers and &#145;10-4&#146; push-to-talk service. Offsetting these
positive impacts on postpaid ARPU for 2006 were lower value-added service revenues and lower basic
access fee revenue as a result of the considerable number of customers subscribing to our &#145;All in
One&#146; plans (discontinued in February&nbsp;2006), for which all service fees and a number of features
are included as part of the monthly plan cost.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid ARPU remained unchanged year over year at $14 per month, despite an increased number
of higher-than-average ARPU Solo and Virgin Mobile customers in our prepaid subscriber base, the
success of the President&#146;s Choice branded mobile service, and higher data usage. These positive
factors were offset by a higher number of inactive prepaid customers in our subscriber base and the
favourable impact on revenues in 2005 of the recognition of deferred revenues related to unused
prepaid minutes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of higher postpaid ARPU, blended ARPU increased by $2 in 2006 to $51 per month,
compared to $49 in the previous year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">2007 <I>Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe that there are considerable opportunities for growth in the wireless market for 2007,
driven by expected further wireless penetration which will effectively expand our addressable
market for new subscribers. In addition, wireless operators are investing in high-speed data
networks, enabling a wider suite of wireless data products and services in the market.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect that our Wireless unit will continue to be a key contributor to Bell Canada&#146;s
revenue and EBITDA growth in 2007. The financial performance of Bell Mobility will depend on our
continued ability to focus on profitable growth and the sound execution of our market strategies.
These strategies include attracting and retaining high value clients, expanding our channels of
distribution, improving our network quality, coverage and speed, as well as enhancing the client
experience. We expect our wireless revenues to increase as a result of higher ARPU from new
services, selective price increases and continued expansion of our subscriber base. Our plan to
achieve higher ARPU in 2007 is expected to be enabled by strengthening our handset and device
portfolio and the continued growth in wireless data. We expect data growth to be driven by higher
take-up rates for data bundles, and increasing usage from wireless services such as text and
picture messaging, web browsing, and music and video downloads.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 29
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Data
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514822.gif" alt="(BAR CHART)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514823.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Data revenues increased 2.6%, or $104&nbsp;million, to $4,120&nbsp;million in 2006 compared to 2005.
The year-over-year improvement was mainly the result of:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;higher Internet revenues stemming from the combined
impact of higher ARPU and an increase in the number of
high-speed Internet access service connections
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;the positive impact of Sympatico&#146;s hardware purchase
program
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;increased sales of IP-based connectivity and ICT solutions in our Business segment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;incremental revenues from companies acquired over the past year to enhance our ICT product portfolio and
create cross-selling opportunities with our Enterprise and SMB customers
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;increased revenues from the SuperNet
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;an adjustment made to revenues in 2005 related to the CRTC&#146;s decision regarding Competitor Digital Network (CDN)&nbsp;Services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The positive effect on data revenue growth in 2006 of these factors was tempered by the impact of
decreased legacy data revenues in our Business segment mainly as a result of competitive pricing
and the ongoing rationalization of circuit networks by wholesale customers. In addition, data
revenue growth for the year was dampened by a number of non-recurring items from 2005, including
the sale of customer contracts within our Enterprise unit related to legacy point-of-sale systems,
fibre and access capacity sales in our Wholesale unit, and the early termination of a wholesale
cross-border facilities contract.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of high-speed Internet subscribers increased by 267,000 in 2006, compared to
387,000 in 2005, bringing the total subscriber count as at December&nbsp;31, 2006 to 2,462,000. Our
primary focus in 2006 was to up-sell customers to higher-speed products in order to increase ARPU,
drive subscriber growth through expanded use of hardware offers such as our PC Fusion and LCD
Monitor programs and reduce customer churn. Sympatico&#146;s subscriber growth in 2006 was adversely
affected by the impact of ongoing aggressive price discounting on multi-product bundle offers from
the major cable operators in our markets. In order to combat the aggressive competitive pricing
conditions in Qu&#233;bec, we launched a targeted marketing campaign during the second quarter of 2006,
offering special promotional rates on our Basic and High Speed Edition services for a limited time
period. Moreover, higher net additions in 2005 were driven by the introduction of our Basic Lite
service offering in the Ontario market and by substantial footprint expansion. A major upgrade to
the Sympatico order management system during the fourth quarter of
2006 also negatively impacted the sales process within
our retail channels and at our contact centres.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The combined impact of an extensive broadband access footprint and focused selling of
entry-level highspeed Internet products has contributed to the expansion of the overall high-speed
market and supported the ongoing erosion of dial-up Internet service. Total dial-up customers
decreased to 511,000 at the end of 2006 from 586,000 at the end 2005. Our high-speed Internet
access footprint in Ontario and Qu&#233;bec reaches more than 85% of homes and business lines passed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">2007 <I>Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, we expect further revenue erosion in our legacy data services from continued customer
migration to IP-based networks, offset by anticipated high-speed Internet subscriber base and
revenue growth, increased penetration of value-added ICT solutions, as well as select price
increases for certain services. We also anticipate our Residential segment to experience slower
high-speed Internet subscriber growth due to the already high level of high-speed Internet access
penetration in our Ontario and Qu&#233;bec markets and sustained aggressive price competition in our
incumbent territories arising from cable operators&#146; increased emphasis on selling multi-product
bundles at discounted rates.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">30 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Video
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514824.gif" alt="(BAR CHART)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514825.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our Video unit reported solid financial performance in 2006, growing its revenues by 17.8% to
$1,150&nbsp;million compared to $976&nbsp;million in 2005. The year-over-year improvement was driven by
subscriber growth and significantly higher ARPU, which reflected the impact of price increases
implemented over the past year, continued up-selling of customers to enhanced programming packages,
further growth of STB rentals and higher pay-per-view take rates.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our video subscriber base grew by 5.4% over the past year to reach 1,820,000 as at December
31, 2006. We added 93,000 new net video subscribers in 2006, compared with higher than average net
additions of 224,000 in 2005. The year-over-year decrease can be attributed mainly to our
increased focus on profitable growth, weaker sales in our retail channels, aggressive analog to
digital conversions by cable operators, and the acquisition of Cable VDN in 2005, which added
12,500 new customers to our subscriber base at that time. Despite lower than expected volumes in
our retail channels during 2006, higher sales in our direct channels were supported by the success
of our &#145;All-in-One&#146; plans, which combine programming, equipment, installation and warranty into
simple packages. Our video churn rate increased slightly to 1.0% in 2006 from 0.9% in the previous
year, due primarily to more aggressive hardware offers from our cable competitors, who bundle
their television service with other products at discounted rates. Higher year-over-year churn also
contributed to softer net activations in the year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Video ARPU increased to $54 per month in 2006 from $50 per month in the previous year. The $4
improvement resulted primarily from customers upgrading to higher-priced programming packages,
higher pay-per-view revenues, and price increases implemented over the past year. In 2006, we
continued to exercise pricing discipline by applying a $2 rate increase at the beginning of the
year on our standard digital programming package for all existing customers without a contract and
by increasing the system access fee in May by $3 per month for a portion of our subscribers. The
year-over-year improvement in ARPU was partly offset by higher customer credits on STB rentals and
programming, as well as by increased customer retention discounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">2007 <I>Outlook</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, growth in video revenues is expected to continue, driven by the ongoing increase in our
subscriber base and further ARPU improvements, which are expected to be achieved through the
full-year impact of price increases in 2006, the implementation of additional price increases in
2007 and the sale of a higher mix of premium and HD programming. We will continue to leverage our
video service as part of our Residential segment&#146;s overall multi-product household strategy in
seeking to maximize the profitability and retention of our existing subscriber base and to support
the increasing penetration of our growth services. We will continue to invest in our IPTV platform
and to develop additional services and capabilities across all video platforms to support our
competitive market positioning for the future. The launch of our IPTV service remains on track,
supported by our FTTN rollout, which will enable our IP network to offer the unique video
experience that IPTV promises to deliver to our customers. Recent milestones reached in our service
trials and in our negotiations with Microsoft and other key suppliers will allow us to extend the
availability of the service beyond the pilot customer groups currently using the service in Toronto
and Montr&#233;al.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Terminal Sales and Other
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514826.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Terminal sales and other revenues decreased 3.7% to $1,577&nbsp;million in 2006,
compared to $1,637&nbsp;million in 2005. The year-over-year decline reflected reduced sales of legacy
voice equipment to Enterprise and SMB customers, the negative impact of a CRTC ruling related to
the fees we charge to competitive local service providers for co-location in Bell Canada&#146;s
switching offices, a decrease in wireless equipment sales at Bell Mobility and lower video STB
sales at Bell ExpressVu. The one-time contribution to revenues in 2005 from the sale of our U.S.
conferencing solutions and a contract to help restore telecommunications service to the areas in
the United States affected by Hurricane Katrina also contributed to the year-over-year decline
in revenues. These factors were partly offset by higher IT service and product sales at Bell
Aliant&#146;s xWave division and higher telecommunications equipment sales associated with Bell
Aliant&#146;s PC purchase program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Financial and Capital Management</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>This section tells you how we manage our cash and capital resources to carry out our
strategy and deliver financial results. It provides an analysis of our financial condition,
cashflows and liquidity on a consolidated basis.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CAPITAL STRUCTURE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Our capital structure shows how much of our net assets are financed by debt and equity.</I>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Debt due within one year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>986</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,161</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>11,867</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,855</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(581</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(349</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total net debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,272</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,667</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,180</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,898</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,367</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,721</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total capitalization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>27,819</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,286</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net debt to capitalization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>44.1</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">41.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding share data (in millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>807.6</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">927.3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>24.2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27.3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><IMG src="m35148orm3514827.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our net debt to capitalization ratio was 44.1% at the end of 2006, compared to 41.8% at the
end of 2005. This was a result of a decrease in total shareholders&#146; equity and a decrease in
non-controlling interest, partly offset by a decrease in net debt.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net debt decreased $395&nbsp;million to $12,272&nbsp;million in 2006 mainly due to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;free cash flow of $708&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;cash provided from discontinued operations of $2,087&nbsp;million mainly relating to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;&nbsp;$665&nbsp;million net proceeds from the sale of our
investment in CTVglobemedia offset by the deconsolidation of CTVglobemedia&#146;s cash on hand of $35&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;&nbsp;CTVglobemedia&#146;s return of capital of $607&nbsp;million
as part of the recapitalization of CTVglobemedia
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;&nbsp;$849&nbsp;million net proceeds from the sale of CGI
offset by the deconsolidation of CGI&#146;s cash on hand of
$81&nbsp;million and $21&nbsp;million incurred for the exercise of
CGI warrants
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;&nbsp;BCI&#146;s return of capital of $156&nbsp;million offset by BCE&#146;s
contribution to BCI of $61&nbsp;million in satisfaction of its
obligation arising from last year&#146;s tax loss monetization
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;&nbsp;$23&nbsp;million of cash generated from CTVglobemedia&#146;s
operations.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This was partly offset by:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;BCE&#146;s repurchase and cancellation of 45&nbsp;million of its
outstanding common shares for $1.2&nbsp;billion
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;an increase in investments of $304&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;Bell Aliant&#146;s redemption of preferred shares for
$175&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;Bell Nordiq&#146;s redemption of preferred shares for
$60&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;Telesat&#146;s redemption of preferred shares for $50&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;obligations of $267&nbsp;million for additional capital leases
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;$255&nbsp;million of costs relating to the formation of
Bell Aliant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">32
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Non-controlling interest decreased by $718&nbsp;million in 2006 due mainly to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$552&nbsp;million relating to the deconsolidation of
CTVglobemedia
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$279&nbsp;million relating to the return of capital as part
of the recapitalization of CTVglobemedia
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell Aliant&#146;s redemption of preferred shares for
$175&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell Nordiq&#146;s redemption of preferred shares for
$60&nbsp;million<BR>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Telesat&#146;s redemption of preferred shares for $50&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This was partly offset by a $469&nbsp;million increase in non-controlling interest at Bell Aliant as a
result of our decreased ownership after the formation of Bell Aliant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders&#146; equity decreased $1,354&nbsp;million to $13,367&nbsp;million in 2006. This was
mainly due to BCE Inc.&#146;s repurchase of 45&nbsp;million of its outstanding common shares for
cancellation through an NCIB and a reduction of 75.8&nbsp;million outstanding common shares in
conjunction with the distribution of Bell Aliant trust units, by way of a return of capital, to
holders of BCE Inc. common shares. This was partly offset by an increase in net earnings of $420
million in excess of both the dividends declared and a reduction because the purchase price of
common shares cancelled in 2006 was higher than the stated capital of common shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">OUTSTANDING SHARE DATA
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We had 807.6&nbsp;million common shares outstanding at the end of 2006, a decrease of 119.7
million over 2005 resulting from BCE Inc.&#146;s repurchase of 45&nbsp;million of its outstanding common
shares for cancellation through a NCIB and the reduction of 75.8&nbsp;million outstanding common shares
by BCE Inc. in conjunction with a distribution of Bell Aliant trust units, by way of a return of
capital, to holders of BCE Inc. common shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of stock options outstanding at the end of 2006 was 24.2&nbsp;million, a decrease of 3.1
million from 2005. The weighted average exercise price of the stock options outstanding at December
31, 2006 was $33. Of the total outstanding stock options at December&nbsp;31, 2006,16.6&nbsp;million were
exercisable at a weighted average exercise price of $35. In 2006:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;0.5&nbsp;million stock options were granted
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;1.2&nbsp;million of previously granted options were exercised
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;2.3&nbsp;million of previously granted options expired or
were forfeited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Starting in 2004, most of the stock options granted contain specific performance targets
that must be met before the option can be exercised.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CASH FLOWS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of the flow of cash into and out of BCE in 2006 and 2005.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash
flows from operating activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,389</B></TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,337</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,133</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,357</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash dividends paid on common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,169</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,195</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash dividends paid on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(84</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(86</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash dividends paid by subsidiaries to
non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(293</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(169</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Free cash
flow</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>708</B></TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">569</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><B>&nbsp;</B></TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Business acquisitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(71</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(228</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(255</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase in investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(304</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(233</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Decrease in investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>64</B></TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Issue of common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>29</B></TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Repurchase of common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,241</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net repayment of debt instruments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(432</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(47</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financing activities of subsidiaries with
third parties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(292</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(77</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(157</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(64</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash provided by discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,087</B></TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net
increase in cash and cash equivalents</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>136</B></TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Cash from Operating Activities
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514828.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cash from operating activities was $5,389&nbsp;million in 2006, an increase of $52&nbsp;million or
1.0% compared to $5,337&nbsp;million in 2005. Cash from operating activities was impacted positively
by:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;improvements in cash earnings resulting from higher
EBITDA
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;a decrease in pension and other benefit plan payments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;a decrease of $25&nbsp;million in interest payments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;an improvement in working capital.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell
Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These improvements were partly offset by:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;
 a decrease of $245&nbsp;million in proceeds from the sale of
accounts receivable
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;
 compensation payments of $67&nbsp;million made to executives and other key employees further to the vesting of
all restricted share units (RSUs) granted for a two-year
performance period ending at the end of 2005, based on
the achievement of specific operating objectives established at the outset of the program two years ago
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;
 payments of $66&nbsp;million in relation to the pay equity settlements announced in Q2 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Free Cash Flow
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514829.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our free cash flow was $708&nbsp;million in 2006, an improvement of $139&nbsp;million, or 24%, over
free cash flow of $569&nbsp;million in 2005. The $52&nbsp;million increase in cash from operating activities
described previously was further impacted by a decrease of $224&nbsp;million in capital expenditures
partly offset by an increase of $124&nbsp;million in dividends paid to non-controlling interest, mainly
for distributions made by Bell Aliant, and by $30&nbsp;million in insurance proceeds received by
Telesat in 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Capital Expenditures
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514830.gif" alt="(BAR CHART)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, we continued to make investments to expand and update our networks, enhance
broadband access and capabilities, and meet customer demand for new services. Capital expenditures
were $3,133&nbsp;million in 2006 for BCE, down 6.7% compared to 2005 capital expenditures of $3,357
million. Similarly, Bell Canada&#146;s capital expenditures decreased 6.3% this year to $2,921&nbsp;million.
The difference in capital expenditures between BCE and Bell Canada was due to spending on
satellite builds at Telesat.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a percentage of revenues, total capital expenditures for BCE decreased to 17.7% in 2006
from 19.1% last year, while capital intensity for Bell Canada declined 1.3&nbsp;percentage points year
over year to reach 16.8%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our capital spending in 2006 reflected reduced spending in the legacy areas of our business
as we focused increasingly on key strategic priorities within our growth services. Our key
strategic priorities for 2006 included:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;
 the expansion of our FTTN footprint to deliver higher-speed broadband access
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;
 further deployment of our EVDO wireless high-speed
mobile data network
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;
 investment in our IPTV platform
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; enhancements to the quality and breadth of our wireless and DSL networks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our capital spending also was lower in 2006 because of reduced spending on IT infrastructure and
systems to support our cost reduction program and productivity initiatives, lower spending at Bell
Aliant and the completion in 2005 of the SuperNet.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, we are targeting to maintain Bell Canada&#146;s capital intensity ratio near its 2006
level. We anticipate a slight increase in overall capital expenditures as we continue to focus on
increasing investment in our key strategic priorities, including wireless growth and network
enhancements, FTTN footprint expansion, deployment of IPTV, and overall network and service
quality.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Other Investing Activities
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cash used in other investing activities of $2&nbsp;million in 2006 decreased by $41&nbsp;million compared to
cash from other investing activities of $39&nbsp;million in 2005 mainly due to insurance proceeds
received by Telesat in 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">34
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises
&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Cash Dividends Paid on Common Shares
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, BCE Inc. paid a dividend of $1.32 per common share, which was equal to the dividend paid
in 2005. The $26&nbsp;million decrease in total cash dividends paid in 2006 is a direct result of a
decrease in the number of BCE Inc. common shares issued and outstanding as at the dividend
declaration date as a result of BCE Inc.&#146;s NCIB announced on February&nbsp;1, 2006 and the reduction in
the number of outstanding common shares on July&nbsp;10, 2006 made in conjunction with the distribution
of Bell Aliant trust units to BCE Inc. shareholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In February&nbsp;2007, the board of directors of BCE Inc. approved an increase of 11% or $0.14 per
common share in the annual dividend on BCE Inc.&#146;s common shares. The quarterly dividends equal
$0.365 per common share compared to $0.33 per common share in 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cash
Dividends Paid by Subsidiaries
to Non-Controlling Interest

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dividends paid by subsidiaries to non-controlling interest of $293&nbsp;million in 2006 increased by
$124&nbsp;million or by 73% compared to $169&nbsp;million for 2005 mainly due to Bell Aliant&#146;s cash
distributions to its unit holders starting in the second half of 2006 as a result of the formation
of the trust.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Business Acquisitions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We invested $71&nbsp;million in 2006 for various business acquisitions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We invested $228&nbsp;million for business acquisitions in 2005. This consisted mainly of:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell Canada&#146;s acquisition of Nexxlink Technologies
Inc. for $74&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell Canada&#146;s acquisition of NR Communications for
$60&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;other business acquisitions, mainly at Bell Canada,
totalling $94&nbsp;million.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Bell Aliant
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cash used for the payment of costs for the formation of Bell Aliant was $255&nbsp;million in 2006. This
included $133&nbsp;million for transaction costs, which related mainly to investment banking,
professional and consulting fees, and $122&nbsp;million for premium costs paid on the redemption, prior
to maturity, of Bell Aliant debt.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Increase in Investments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cash flows used for investments in 2006 of $304&nbsp;million increased $71&nbsp;million or 30% from $233
million in 2005. The activity in 2006 includes our additional investment of US$84&nbsp;million in
Clearwire Corporation (Clearwire), a privately-held company that offers advanced IP-based wireless
broadband communications services, in order to maintain our 12% interest in the company. Telesat
increased its short-term investments by $15&nbsp;million.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The activity in 2005 relates mainly to our investment of US$100&nbsp;million to acquire an
approximate 12% interest in Clearwire in the first quarter of 2005 and Telesat&#146;s increase in
short-term investments of $63&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Decrease in Investments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cash flows provided by investments of $64&nbsp;million in 2006 increased by $47&nbsp;million compared to $17
million in 2005, mainly due to the sale of short-term investments of $64&nbsp;million at Telesat.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Repurchase of Common Shares
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In total for 2006, BCE Inc. repurchased for cancellation 45&nbsp;million common shares, or
approximately 5% of the company&#146;s outstanding common shares, for a total cost of $1,241&nbsp;million
under the 2006 NCIB program. On December&nbsp;12, 2006, BCE Inc. also announced its plan to renew its
share buyback program for another twelve-month period to repurchase approximately another 5% of its
outstanding common shares through a NCIB, representing an estimated value in excess of $1&nbsp;billion.
On February&nbsp;6, 2007, the company received acceptance from the Toronto Stock Exchange of its notice
of intention to make a NCIB.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Debt Instruments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>We use a combination of short-term and long-term debt to finance our operations. Our
short-term debt consists mostly of bank facilities and notes payable under commercial paper
programs. We usually pay fixed rates of interest on our long-term debt and floating rates on our
short-term debt.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2006, we repaid $432&nbsp;million of debt, net of issuances, including the following:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;BCE Inc. repaid $1,350&nbsp;million of debt
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell Canada repaid $463&nbsp;million of debt
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell Aliant redeemed $785&nbsp;million of debentures and
bonds
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Telesat repaid $150&nbsp;million in notes payable
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;we made other repayments that included capital leases.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This was partly offset by Bell Aliant&#146;s draw down of $1,235&nbsp;million of its credit facilities
and the issuance of $1,250&nbsp;million of debt.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2005, we repaid $47&nbsp;million of debt, net of issuances. The repayments included $750
million in debentures at Bell Canada and other repayments that included capital leases. The
issuances included $900&nbsp;million in debentures at Bell Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Cash Relating to Discontinued Operations
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, cash provided by discontinued operations was $2,087&nbsp;million. This consisted mainly of:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$665&nbsp;million net proceeds from the sale of our investment in CTVglobemedia offset by the deconsolidation of
CTVglobemedia&#146;s cash on hand of $35&nbsp;million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;CTVglobemedia&#146;s return of capital of $607&nbsp;million as
part of the recapitalization of CTVglobemedia
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$849&nbsp;million net proceeds from the sale of CGI&#146;s offset by
the deconsolidation of CGI&#146;s cash on hand of $81&nbsp;million
and $21&nbsp;million incurred for the exercise of CGI warrants
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;BCI&#146;s return of capital of $156&nbsp;million offset by BCE&#146;s
contribution to BCI of $61&nbsp;million in satisfaction of its
obligation arising from last year&#146;s tax loss monetization
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$23&nbsp;million of cash generated from CTVglobemedia&#146;s
operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2005, cash provided by discontinued operations was $103&nbsp;million and was mainly related to cash
generated from CTVglobemedia and CGI&#146;s operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CREDIT RATINGS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The interest rates we pay are based partly on the quality of our credit ratings, which were all
investment grade at March&nbsp;7, 2007. Investment grade ratings usually mean that when we borrow money,
we qualify for lower interest rates than companies that have ratings lower than investment grade.
BCE Inc. and Bell Canada have stable outlooks from
<I>DBRS</I><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP>,
Moody&#146;s<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP> and
Fitch<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP>
and a negative outlook from
S&#038;P<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></I>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below lists BCE Inc.&#146;s and Bell Canada&#146;s key credit ratings at March&nbsp;7, 2007.
On December&nbsp;12, 2006, S&#038;P removed BCE Inc. and Bell Canada from Credit Watch and affirmed their
ratings; DBRS removed the long-term debt and preferred shares ratings of BCE Inc. and Bell Canada
from under review and confirmed their ratings; Moody&#146;s affirmed BCE Inc. and Bell Canada&#146;s ratings;
and on October&nbsp;11, 2006, Fitch affirmed BCE Inc. and Bell Canada&#146;s ratings.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">BCE INC.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S&#038;P<SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">DBRS<SUP style="font-size: 85%; vertical-align: text-top">(2) </SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">MOODY&#146;S<SUP style="font-size: 85%; vertical-align: text-top">(3) </SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">FITCH<SUP style="font-size: 85%; vertical-align: text-top">(4) </SUP></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Commercial paper
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top" nowrap>A-l (low
</TD>
    <TD>)</TD>
    <TD align="right" valign="top" nowrap>R-1 (low
</TD>
    <TD>)</TD>
    <TD align="right" valign="top">P-2
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Extendible commercial notes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top" nowrap>R-2 (high</TD>
    <TD>)</TD>
    <TD align="right" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Long-term debt
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top" nowrap>BBB&#043;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top" nowrap>A (low</TD>
    <TD>)</TD>
    <TD align="right" valign="top">Baa2
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top" nowrap>BBB&#043;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Preferred shares
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">P-2
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Pfd-2 (low</TD>
    <TD>)</TD>
    <TD align="right" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">BELL CANADA</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S&#038;P<SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">DBRS<SUP style="font-size: 85%; vertical-align: text-top">(2) </SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">MOODY&#146;S<SUP style="font-size: 85%; vertical-align: text-top">(3) </SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">FITCH<SUP style="font-size: 85%; vertical-align: text-top">(4) </SUP></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Commercial paper
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">A-l (low</TD>
    <TD>)</TD>
    <TD align="right" valign="top">R-l (low</TD>
    <TD>)</TD>
    <TD align="right" valign="top">P-2
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Extendible commercial notes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">R-l (low</TD>
    <TD>)</TD>
    <TD align="right" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Long-term debt
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">A-
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Baal
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">BBB&#043;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Subordinated long-term debt
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">BBB&#043;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">BBB (high</TD>
    <TD>)</TD>
    <TD align="right" valign="top">Baa2
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">BBB</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" valign="top" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 3pt; width: 1%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Standard &#038; Poor&#146;s, a division of The McGraw-Hill Companies, Inc.</I><BR></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><I>(2)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Dominion Bond Rating Services Limited</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><I>(3)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Moody&#146;s Investors Service, Inc.</I><BR></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><I>(4)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Fitch Ratings Ltd.</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt">36 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">LIQUIDITY
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We expect to generate enough cash in 2007 from our operating activities to pay for capital
expenditures and dividends. In other words, we are targeting free cash flow in 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to repay contractual obligations maturing in 2007, including repayment of our
outstanding debt, and share buybacks from cash on hand, cash generated from our operations, by
issuing new debt and by selling non-core assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Cash Requirements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, we will need cash mainly for capital expenditures, dividend payments, pension funding,
the payment of contractual obligations and outstanding debt, share buybacks and other cash
requirements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Capital Expenditures</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Capital expenditures were $3.1&nbsp;billion in 2006, representing 17.7% of our revenues for the
year. Capital expenditures for Bell Canada were $2.9&nbsp;billion in 2006, representing 16.8% of Bell
Canada&#146;s revenues for the year. We are targeting to maintain Bell Canada&#146;s capital intensity ratio
relatively near its 2006 level for 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Pension Funding</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We expect to contribute approximately $270&nbsp;million to our defined benefit pension plans in
2007, subject to actuarial valuations being completed. We expect to pay approximately $100&nbsp;million
to beneficiaries under other employee benefit plans in 2007. We expect to contribute approximately
$30&nbsp;million to the defined contribution pension plans in 2007. Of the total funding requirements
above, approximately $300&nbsp;million relates to Bell Canada.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Contractual Obligations</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of our contractual obligations at December&nbsp;31, 2006
that are due in each of the next five years and after 2011.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">THERE-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AFTER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TOTAL</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">Long-term debt (excluding capital leases)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,754</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Notes payable and bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,063</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">771</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,619</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commitments for capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchase obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,295</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">988</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,864</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term liabilities (including current portion)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">277</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,928</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,033</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Long-term debt and notes payable and bank advances include $1,344&nbsp;million drawn under
our committed credit facilities. They do not include $444&nbsp;million of letters of credit. The total
amount available under these committed credit facilities and under our commercial paper programs,
including the amount currently drawn, is $4.4&nbsp;billion. Current commercial paper credit lines expire
in August&nbsp;2009 and Bell Aliant&#146;s current commercial paper credit lines expire in July&nbsp;2011.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The imputed interest to be paid on capital leases is $474&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rental expense relating to operating leases was $275&nbsp;million in 2006, $312&nbsp;million in 2005
and $354&nbsp;million in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase obligations consist mainly of contractual obligations under service contracts. Our
commitments for capital expenditures include investments to expand and update our networks, and to
meet customer demand.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other long-term liabilities included in the table relate to:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada&#146;s future payments over the remaining
life of its contract with Amdocs Canadian Managed
Services, Inc. for the development of Bell Canada&#146;s
billing system. The total amount was $204&nbsp;million at
December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;Telesat&#146;s deferred satellite performance incentive payments and their deferred milestone payments. The total amount was $73&nbsp;million at December&nbsp;31, 2006.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell
Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 37
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At December&nbsp;31, 2006, we had other long-term liabilities that were not included in the table,
including an accrued employee benefit liability, future income tax liabilities, deferred revenue
and gains on assets and various other long-term liabilities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We did not include the accrued employee benefit liability and future income tax liabilities
in the table because we cannot accurately determine the timing and amount of cash needed for them.
This is because:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;future contributions to the pension plans depend
largely on how well they are funded. This varies based
on the results of actuarial valuations that are performed
periodically and on the investment performance of the
pension fund assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;future payments of income taxes depend on the amount
of taxable earnings and on whether there are tax loss
carryforwards available to reduce future income tax
liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We did not include deferred revenue and gains on assets in the table because they do not represent
future cash payments.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Other Cash Requirements</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our cash requirements may also be affected by the liquidity risks related to our contingencies,
off-balance sheet arrangements and derivative instruments. We may not be able to quantify all of
these risks.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Off-Balance Sheet Arrangements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Guarantees</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a regular part of our business, we enter into agreements that provide for indemnifications and
guarantees to counterparties in transactions involving business dispositions, sales of assets,
sales of services, purchases and development of assets, securitization agreements and operating
leases.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot reasonably estimate the maximum potential amount we could be required to pay
counterparties because of the nature of almost all of these indemnifications. As a result, we
cannot determine how they could affect our future liquidity, capital resources or credit risk
profile. We have not made any significant payments under these indemnifications in the past. See
Note 27 to the consolidated financial statements for more information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Securitization of Accounts Receivable</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada and Bell Aliant have agreements in place that provide them with a more attractive form
of financing other than debt financing.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the agreements, Bell Canada and Bell Aliant sold interests in pools of accounts
receivable to securitization trusts for a total of $1,320&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The total accounts receivable that were sold must meet minimum performance targets. These are
based on specific delinquency, default and receivable turnover ratio calculations, as well as
minimum credit ratings. If these accounts receivable go into default, Bell Canada and Bell Aliant
would no longer be able to sell their receivables and would need to find an alternate source of
financing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These agreements are an important part of our capital structure and liquidity. If we did not
have them, we would have issued $1,320&nbsp;million of debt or equity. See Note 11 to the consolidated
financial statements for more information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Commitment under the CRTC Deferral Account Mechanism</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please refer to <I>Commitment under the CRTC Deferral Account Mechanism </I>within the <I>Regulatory
Environment </I>section for further analysis.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Derivative Instruments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We use derivative instruments to manage our exposure to interest rate risk, foreign currency risk
and changes in the price of BCE Inc. common shares that may be issued under our special
compensation payments (SCPs) and deferred share units (DSUs). We do not use derivative instruments
for speculative purposes. Since we do not trade actively in derivative instruments, we are not
exposed to any significant liquidity risks relating to them.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The carrying value of the outstanding derivative instruments was a net liability of $53
million at December&nbsp;31, 2006. Their fair values amounted to a net liability of $96&nbsp;million. See
Note 22 to the consolidated financial statements for more information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">38
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises
&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Litigation
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We become involved in various claims and litigation as a part of our business. While we cannot
predict the final outcome of claims and litigation that were pending at December&nbsp;31, 2006, based
on information currently available, management believes that the resolution of these claims and
litigation will not have a material and negative effect on our consolidated financial position
or results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You will find a more detailed description of the material claims and litigation pending at
December&nbsp;31, 2006 in the BCE 2006 AIF, and in Note 26 to the consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Sources of Liquidity</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While we do not expect a cash shortfall in the foreseeable future, we would cover any
shortfall through the financing facilities we currently have in place.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These financing facilities, along with our strengthening balance sheet, give us flexibility
in carrying out our plans for future growth. If necessary, we can supplement our liquidity
sources by issuing additional debt or equity, or by selling non-core assets. We might do this to
help finance business acquisitions or for contingencies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below is a summary of our outstanding lines of credit, bank facilities and
commercial paper programs at December&nbsp;31, 2006.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">NON-&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">COMMITTED</TD>
    <TD>&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">COMMITTED</TD>
    <TD>&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TOTAL</TD>
    <TD>&nbsp;</TD>

</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Commercial paper credit lines <SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,711</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3,711</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Other credit facilities <SUP style="font-size: 85%; vertical-align: text-top">(2) </SUP>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,653</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">751</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3,404</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Total</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4,364</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,751</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7,115</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" valign="top" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Drawn
</B><SUP style="font-size: 85%; vertical-align: text-top">(2) </SUP>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,787</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,787</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Undrawn</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,577</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,751</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5,328</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" valign="top" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 3pt; width: 3%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>BCE Inc.&#146;s and Bell Canada&#146;s current commercial paper credit lines expire in August</I>
2009 <I>and Bell Aliant&#146;s current commercial paper credit lines expire in July&nbsp;2011.</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><I>(2)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Includes $444&nbsp;million in letters of credit.</I></TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc., Bell Canada and Bell Aliant may issue notes under their commercial paper programs
up to the amount of their supporting committed lines of credit. The total amount of these
supporting committed lines of credit available (net of letters of credit) was $1.7&nbsp;billion at
December&nbsp;31, 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc., Bell Canada and Bell Aliant had no commercial paper outstanding at December&nbsp;31,
2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada can issue up to $400&nbsp;million of Class&nbsp;E notes under its commercial paper
programs. These notes are not supported by committed lines of credit and may be extended in
certain circumstances. Bell Canada had no Class&nbsp;E notes outstanding at December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Competitive Environment</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We face intense competition from traditional competitors, as well as from new players
entering our markets. We compete with telecommunications and television service providers. We also
compete with other businesses and industries including cable, software and Internet companies, and
a variety of companies that offer network services, such as providers of business information
systems, systems integrators and other companies that deal with, or have access to, customers
through various communications networks.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Competition affects our pricing strategies and could reduce our revenues and lower our
profitability. It could also affect our ability to retain existing customers and attract new ones.
We are under constant pressure to keep our prices and service offerings competitive. Changes in
our pricing strategies that result in price increases for certain services or products or changes
in pricing strategies by our competitors could affect our ability to gain new customers and retain
existing ones. We need to be able to anticipate and respond quickly to the constant changes in our
businesses and markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We already have several domestic and foreign competitors, but the number of well resourced
foreign competitors with a presence in Canada could increase in the future. In recent years, the
Government of Canada has reviewed the foreign ownership restrictions that apply to
telecommunications carriers and broadcast distribution undertakings. Removing or easing the limits
on foreign ownership could result in foreign companies entering the Canadian market by making
acquisitions or investments. This could result in greater access to capital for our competitors or
the arrival of new competitors with global scale, which would increase competitive pressure. We
cannot predict what action, if any, the federal government will take as a result of these reviews
and how it may affect us.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell
Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;39
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">WIRELINE AND LONG DISTANCE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We experience significant competition in the provision of long distance service from dial-around
providers, prepaid card providers, VoIP service providers and others, and from traditional
competitors such as interexchange carriers and resellers. We also face increasing cross-platform
competition as customers replace traditional services with new technologies. For example, our
wireline business competes with VoIP, wireless and Internet services, including chat services,
instant messaging and e-mail. In particular, there is a risk that wireline to wireless
substitution could accelerate with the introduction of wireless number portability (refer to
<I>Regulatory Environment &#151; Wireless Number Portability </I>below for more details concerning the
implementation of wireless number portability).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are also facing competitive pressure from cable companies as a result of them offering
voice services over their networks. Although we expect the rate of losses in our residential NAS to
stabilize in 2007, this assumption could be adversely affected by the level of intensity applied by
our cable competitors in pursuing their voice strategy. This assumption could also be adversely
affected by the level of wireline to wireless substitution resulting from the implementation of
wireless number portability. Additional competitive pressure is also emerging from other
competitors such as electrical utilities. These alternative technologies, products and services are
making inroads in our legacy services, which typically represent our higher margin business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technology substitution, and VoIP in particular, have reduced barriers to entry in the
industry. This has allowed competitors with far lower investments in financial, marketing,
personnel and technological resources to rapidly launch new products and services and gain market
share. We expect this trend to continue in the future, which could materially and negatively
affect our financial performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Competition for contracts to supply long distance services to large business customers is
very intense. Customers may choose to switch to competitors that offer lower prices to gain market
share. Such competitors may be less concerned about the quality of service or the impact on their
margins than we are.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These competitive factors suggest that the number of our legacy wireline customers and our
long distance volumes will continue to decline in the future. Continued decline will lead to
reduced economies of scale in those businesses and, in turn, lower margins. Our strategy is to
mitigate these declines through cost reductions and by building the business for newer growth
services. The margins on newer services, however, are less than the margins on legacy services. If
legacy services revenues decline faster than the rate of growth in revenues of our newer services,
our financial performance could be negatively and materially affected. Bringing to market new
growth products and services is inherently risky, as it requires capital and other investments,
while the demand for the products or services is uncertain. It may also require us to compete in
areas outside our core connectivity business against highly capable global information technology
service providers. The launch of new products or services could be delayed or cancelled due to
reductions in the amount of capital available to be invested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">INTERNET ACCESS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We compete with cable companies and Internet service providers (ISPs) to provide broadband and
dial-up Internet access and related services. In particular, cable companies have focused on
increased bandwidth and discounted pricing on bundles to compete against us.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regional electrical utilities continue to develop and market services that compete directly
with Bell Canada&#146;s Internet access services. Developments in wireless broadband services may also
lead to increased competition in certain geographic areas. This could materially and negatively
affect the financial performance of our Internet access services business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is a risk that should the pace of our FTTN rollout be slower than currently
contemplated in our business plan, our broadband ISP churn rate could increase beyond our current
expectations, thereby adversely affecting our expected number of Internet subscribers in 2007.
With the rapid growth in video applications on the Internet, there is also a risk that we will
need to incur significant capital expenditures to provide additional capacity on our Sympatico
network, which costs we may not be able to recover initially from customers due to competitors&#146;
short-term pricing of equivalent Internet services. This could have a material adverse effect on
our results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">40
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises
&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">WIRELESS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Canadian wireless telecommunications industry is also highly competitive. We compete
directly with other wireless service providers, including resellers known as mobile virtual network
operators, that aggressively introduce, price and market their products and services. We also
compete with wireline service providers. We expect competition to intensify as new technologies,
products and services are developed. In addition, competition could also increase as a result of
Industry Canada&#146;s intention to initiate a consultation which could result in the licensing of
additional mobile spectrum (refer to <I>Regulatory Environment &#150; Mobile Spectrum </I>below for more details on this subject). Furthermore,
wireless number portability could increase churn beyond our current expectations and adversely
affect our estimates concerning our expected number of wireless subscribers in 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">VIDEO
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell ExpressVu competes directly with another DTH satellite television provider and with cable
companies across Canada. These cable companies have upgraded their networks, operational systems
and services, which has improved their competitiveness. This could materially and negatively affect
the financial performance of Bell ExpressVu and Bell Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Regulatory Environment</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DECISIONS OF REGULATORY AGENCIES

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our business is affected by decisions made by various regulatory agencies, including the CRTC.
For example, many of the decisions of the CRTC indicate that it tries to balance requests from
competitors for access to facilities, such as the telecommunications networks, switching and
transmission facilities, and other network infrastructure of incumbent telephone companies, with
the rights of the incumbent telephone companies to compete reasonably freely. There is a risk that
decisions of the CRTC, and in particular the decisions relating to prices at which we must provide
such access, may have a negative effect on our business and results of operations. Decisions of,
and proceedings involving, regulatory agencies including the CRTC are described in more detail
below as well as in the BCE 2006 AIF under the heading <I>The Regulatory Environment we operate in</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">TELECOM POLICY REVIEW PANEL&#146;S FINAL REPORT
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;22, 2006, the Telecommunication Policy Review Panel (Panel), a panel of experts
appointed by the Minister of Industry to review Canada&#146;s telecommunications policy and regulatory
framework and make recommendations, released its final report. The report, which contains over 100
recommendations, calls for significant changes to the structure and nature of telecommunications
regulation in Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Panel&#146;s report calls for many changes to the regulatory environment that could have a
material impact on our business performance. The thrust of the report is that the state of
competition in Canada has progressed to the point where, at least for economic regulation, the CRTC
should remove most of its existing regulations and instead rely on market forces.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Panel calls for short-term changes to regulation through a variety of federal government
programs and, more significantly, through a policy direction &#150; an instrument whereby the Cabinet
can give binding directions on general policy to the CRTC. The Panel also calls for significant
changes to the <I>Telecommunications Act</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Panel also recommends a relaxation of Canada&#146;s foreign ownership restrictions as they
apply to telecommunications common carriers. In addition to the recommendations addressing wireline
regulation, the Panel also makes a number of recommendations separately addressing issues related
to wireless regulation in Canada. These include, among other things, a recommendation for the
continued use of regulatory mechanisms such as spectrum caps (aggregation limits) where spectrum is
scarce to provide an opportunity for new entrants to acquire spectrum in order to have an expanded
choice of service providers. Other recommendations concerning competitive access to wireless antennae sites and support
structures could serve to facilitate competitive entry into the Canadian wireless industry. If
implemented, the cumulative effect of such recommendations could have a negative effect on our
business and results of operations.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell
Canada Enterprises <I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">POLICY DIRECTION
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;13, 2006, the Minister of Industry
tabled in both houses of Parliament a draft
policy direction to be issued by the Cabinet to
the CRTC. On December&nbsp;14, 2006, the policy
direction issued by the Cabinet to the CRTC
(Policy Direction) came into effect. The Policy
Direction calls on the CRTC to &#147;rely on market
forces to the maximum extent feasible&#148; and to
design regulations that &#147;interfere with the
operation of competitive market forces to the
minimum extent necessary.&#148; The CRTC is bound to
follow the Policy Direction in making its
decisions. However, the Policy Direction is of a
general policy nature and does not direct the
CRTC to reach any particular outcomes on any
specific files.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">COMMITMENT UNDER THE CRTC DEFERRAL
ACCOUNT MECHANISM
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;16, 2006, the CRTC issued Telecom
Decision 2006-9, where it concluded on the ways
in which incumbent telephone companies should
clear the accumulated balances in their deferral
accounts. On September&nbsp;1, 2006, Bell Canada and
Bell Aliant filed their proposals for clearing
the accumulated balances in their deferral
accounts. If approved by the CRTC, the proposals
would improve access to communications for
persons with disabilities (5% of estimated
balance) and extend broadband access to some
220,000 potential customers in 264 communities
across Ontario and Qu&#233;bec where it would not
otherwise be made available on a commercial
basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;30, 2006, the CRTC issued Public
Notice 2006-15, initiating a proceeding to assess
these proposals. A decision in this proceeding is
scheduled to be issued in January&nbsp;2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada&#146;s accumulated deferral account
balance at December&nbsp;31, 2006 is estimated to be
$479&nbsp;million, with an estimated future annualized
commitment of $24&nbsp;million. Bell Aliant&#146;s
accumulated deferral account balance at December
31, 2006 is estimated to be $8&nbsp;million, with no
estimated future annualized commitment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the nature and number of
uncertainties that remain concerning the
disposition of accumulated balances in the
deferral account, we are unable to estimate the
impact of the CRTC&#146;s decision on our financial
results at this time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">PRICE CAP FRAMEWORK REVIEW
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;9, 2006, the CRTC issued Public Notice
2006-5, initiating a proceeding to establish the
price cap framework to replace the existing
framework that ends on May&nbsp;31, 2007. On July&nbsp;10,
2006, Bell Canada, Bell Aliant and Saskatchewan
Telecommunications filed a pricing framework
proposal that reflects the significant changes
that have taken place in the industry. The
proposed framework would come into effect on June
1, 2007 and apply for a period of two years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We proposed that the price cap should be
removed in areas where services are available via
alternative facilities, allowing consumers and
competition in these areas to drive market
prices. In areas where alternative facilities are
not available, we proposed that service prices
remain subject to regulation with upward pricing
capped, on average, at current levels. In keeping
with both the recommendations of the Panel issued
in March&nbsp;2006 and the Policy Direction, our
proposal would interfere with market forces to
the least extent possible. The evidence was
subject to an interrogatory process as well as a
public hearing, which took place in October&nbsp;2006.
The CRTC intends to issue a decision on this
proceeding by April&nbsp;30, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is a risk that the CRTC may not accept
our proposals to rely on market forces to the
maximum extent possible and may continue to
impose limitations on our marketing flexibility,
impeding our ability to respond to market forces.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">REVIEW OF REGULATORY FRAMEWORK
FOR WHOLESALE SERVICES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As required by the Policy Direction, on
November&nbsp;9, 2006, the CRTC released Public Notice
2006-14, in which it initiated a comprehensive
review of the regulatory framework requiring
incumbent telephone companies to provide
wholesale access to certain telecommunication
services to competitors. As part of this review,
the CRTC will examine the appropriate definition
of essential services and the pricing principles
for such services. In addition, the regulatory
treatment for non-essential services will also be
examined. A final decision is expected in July
2008. There is no guarantee that the CRTC will
issue a favourable decision.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">42 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CDN SERVICES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;3, 2005, the CRTC released
Telecom Decision 2005-6 on CDN services. This
decision set the rates, terms and conditions for
the provision of digital network services by Bell
Canada, Bell Aliant and the other incumbent
telephone companies to their competitors. The
CRTC determined that CDN services should include
not only digital network access components but
also intra-exchange facilities, inter-exchange
facilities in certain metropolitan areas, and
channelization and co-location links (expanded
CDN services). This decision affected Bell Canada
and Bell Aliant as providers of CDN services in
their own operating territories and as purchasers
of those services elsewhere in Canada.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are two important financial aspects to
note in this decision:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; the prices for all new CDN
services were applied on a going-forward basis,
as of the date of the decision, and Bell Canada
and Bell Aliant will be relieved of some of their
obligations from the deferral account for the
revenue losses from this decision
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp;&nbsp;Bell Canada&#146;s and Bell Aliant&#146;s
obligations under the deferral account also will
be reduced for applying the lower rates
retroactively for the CDN access components that
were tariffed at interim rates prior to the
decision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;2, 2007 and February&nbsp;15, 2007, the
CRTC released Telecom Decisions 2007-6 and
2007-10 respectively, regarding matters
unresolved in Telecom Decision 2005-6 pertaining
to the terms and conditions of CDN services. In
these decisions the CRTC determined that certain
retail service components did not apply to CDN
services. Bell Canada and Bell Aliant will be
compensated through the deferral account for
applying refunds retroactively, and for rate
reductions on a going-forward basis.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">FORBEARANCE FROM REGULATION OF
LOCAL EXCHANGE SERVICES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On April&nbsp;6, 2006, the CRTC issued Telecom
Decision 2006-15, which established a framework
for the forbearance from regulation of local
exchange services. The decision denied Bell
Aliant&#146;s application for regulatory forbearance
in 32 exchanges in Nova Scotia and Prince Edward
Island. The denial of Bell Aliant&#146;s forbearance
application in respect of the Halifax market is
the subject of an appeal to the Federal Court of
Appeal by Bell Aliant. The Federal Court of
Appeal granted Bell Aliant&#146;s leave to appeal the
decision in an order dated September&nbsp;22, 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;12, 2006, Bell Canada, Bell Aliant,
Saskatchewan Telecommunications and TELUS
Communications Company (TELUS)&nbsp;filed a petition
to the Governor-in-Council requesting that the
Minister of Industry recommend to the
Governor-in-Council that Decision 2006-15 be
referred back to the CRTC for reconsideration.
Specifically, the companies requested that the
CRTC be directed to reconsider the
pre-forbearance, forbearance and post-forbearance
rules in Decision 2006-15 in light of the
conclusions and recommendations contained in the
Panel&#146;s final report, issued in March&nbsp;2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;16, 2006, the CRTC issued Public
Notice 2006-9, in which it sought comments
regarding whether mobile wireless services, or a
subset thereof, should be considered in the
market share loss calculation for local
forbearance analysis purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;1, 2006, the CRTC issued Public
Notice 2006-12, in which it sought comments
regarding whether the &#145;transitional&#146; market share
loss threshold of 20% as a precondition to the
repeal of the winback rule and the market share
loss threshold of 25% for forbearance established
in Decision 2006-15 are appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;5, 2006, TELUS applied to the
CRTC to review and vary one of the forbearance
criteria defined in Decision 2006-15. TELUS&#146;
application requests that the CRTC remove or
amend the forbearance criterion requiring
incumbent local exchange carriers to meet certain
wholesale quality of service standards.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual </I>Report &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 43
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;11, 2006, the Minister of
Industry announced a government proposal to
change Decision 2006-15 to accelerate
deregulation of retail prices of the incumbent
telephone companies&#146; local exchange services. The
Minister has separately proposed amendments to
the <I>Competition Act </I>to deter anticompetitive
behaviour in the telecommunications industry. The
proposed order to vary Decision 2006-15
establishes a forbearance test which (i)&nbsp;is based
on the presence of competitors in geographic
areas that are smaller and (ii)&nbsp;amends the
forbearance criteria related to meeting certain
quality of service indicators for incumbent local
exchange carriers&#146; wholesale services. The
proposed order would also streamline the
forbearance process and eliminate the winback and
promotional restrictions in regulated and
deregulated areas. The federal government is
considering the comments received and must make a
final determination by April&nbsp;6, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In light of the federal government&#146;s
proposal to change Decision 2006-15, the CRTC
deferred its consideration of the issues in
Public Notice 2006-9 and Public Notice 2006-12
and TELUS&#146;s review and vary application noted
above pending a final determination with respect
to the proposed order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the proposed changes to Decision
2006-15 are positive for us, there can be no
guarantee that the order will be issued or that
the order will not be amended prior to its
issuance. Furthermore, there is no guarantee that
the outcomes of any of these proceedings will
improve the likelihood that, or speed with which,
Bell Canada and Bell Aliant will be granted
forbearance regarding local exchange services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">WINBACK RULES
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On April&nbsp;6, 2006, the CRTC issued decisions
relating to winbacks, namely Telecom Decision
2006-15 and Telecom Decision 2006-16.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In Decision 2006-15, the CRTC reduced the
length of the no-winback period for residential
subscribers to three months from 12&nbsp;months. Under
the amended winback rule, incumbent telephone
companies are now precluded from contacting former residential and business
local exchange service customers from the time of
the local service request until three months
after their local service is transferred to a
competitor. In Decision 2006-15 the CRTC also
ruled that incumbent telephone companies may
apply to have the winback rule repealed in any
local market where they have lost 20% of market
share and in which they have met the relevant
competitor quality of service indicators in the
three months preceding the date of the
application.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In Decision 2006-16, the CRTC determined
that the winback rule is constitutional because
it is justifiable under the Canadian Charter of
Rights and Freedoms. The CRTC also decided that,
going forward, incumbent telephone companies are
now permitted to market non-residential local
telecommunications services to a former local
exchange customer during, and following, the
three month no-winback period if that customer
did not switch those other services to the
competitor at the same time they migrated their
local service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following applications filed by Bell Canada,
Bell Aliant, SaskTel and TELUS, the Federal Court
of Appeal granted leave to appeal these decisions
on the constitutionality issue in an Order dated
September&nbsp;22, 2006. Bell Canada&#146;s and Bell
Aliant&#146;s flexibility to compete may continue to
be encumbered if the Federal Court of Appeal
determines that the winback rule is
constitutional.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;18, 2006, the CRTC released Telecom Decision 2006-28, <I>Regulatory Issues Related to the
Implementation of Wireless Number Portability</I>. In that decision, the CRTC confirmed that the
winback restrictions on incumbent telephone companies do not apply to a wireline-to-wireless port
request by a customer in the context of wireless number portability such that there will be no
restrictions on the ability of either Bell Canada or Bell Mobility to contact a wireline or
wireless customer who has transferred to a competitor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As indicated in the section entitled <I>Forbearance from Regulation of Local Exchange Services</I>,
on December&nbsp;11, 2006, the Minister of Industry announced a government proposal to change Telecom
Decision 2006-15 to, among other things, eliminate the winback and promotional restrictions in
regulated and deregulated areas.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">44 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">WIRELESS NUMBER PORTABILITY
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Government of Canada in its 2005 budget
announced that it intended to ask the CRTC to
implement wireless number portability. Number
portability enables customers to retain the same
phone number when changing service providers
within the same local serving area. On December
20, 2005, the CRTC released Telecom Decision
2005-72. Among other things, the decision
directed Bell Mobility, Rogers Wireless and Telus
Mobility to implement wireless number portability
in Alberta, British Columbia, Ontario and Quebec
by March&nbsp;14, 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In Telecom Decision 2006-28, <I>Regulatory
Issues Related to the Implementation of Wireless
Number Portability &#150; Follow-Up to Public Notice
2006-3</I>, issued on May&nbsp;18, 2006, the CRTC made a
number of policy determinations covering a wide
range of implementation issues and requested that
three CRTC interconnection steering committee
working groups undertake various tasks and file
reports with the CRTC. In Telecom Decision
2006-74, issued on November&nbsp;22, 2006, the CRTC
approved with one change the consensus reports.
In an application dated May&nbsp;12, 2006, Bell Canada
requested that it be allowed to recover wireline
costs related to the implementation of wireless
number portability through a draw down from Bell
Canada&#146;s deferral account. Bell Canada filed
reply comments on June&nbsp;26, 2006. The CRTC has
requested further information from Bell Canada on
its application and responses were filed on
December&nbsp;4, 2006. There is no guarantee that the
CRTC will issue a favourable decision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RETAIL QUALITY OF SERVICE INDICATORS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;24, 2005, the CRTC released Telecom
Decision 2005-17, which, among other things,
established the rate adjustment plan to be
applied when incumbent telephone companies do not
meet mandated standards of quality of service
provided to their retail customers. As a result
of this decision, incumbent telephone companies
are subject to a penalty mechanism when they do
not meet one or more service standards for their
retail services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the penalty period of January 1 to
December&nbsp;31, 2005, the CRTC standard for several
indicators was not met on an annual average basis
because of the strike in 2005 by the CEP at
Entourage. Bell Canada has requested that the
CRTC approve its December&nbsp;5, 2005 application for
the purpose of excluding below-standard
strike-related results as a <I>force majeure </I>type
exclusion. However, there is no assurance that
the CRTC will issue a favourable decision and
Bell Canada may be required to pay a penalty of
up to $18&nbsp;million. It is not expected that Bell
Canada will be required to pay any penalties
related to retail quality of service for the
period of January 1 to December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The CRTC determined that Bell Aliant did not
meet certain service standards during the period
of January 1 to December&nbsp;31, 2004. Bell Aliant
applied to the CRTC for an exclusion from having
to pay a penalty in 2004, as well as in 2005, due
to below-standard service results caused by its
labour disruption in 2004. In Telecom Decision
2006-27, which was issued on May&nbsp;16, 2006, the
CRTC determined that the labour disruption was
partially, but not totally, beyond the control of
Bell Aliant. In total, Bell Aliant was directed
to provide customer credits totalling $3.5
million on its customers&#146; monthly bills starting
no later than June&nbsp;16, 2006. These customer
credits have been applied.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the same time, Bell Aliant has filed with
the CRTC an application to review and vary
Telecom Decision 2005-17, as applied in Decision
2006-27, to indicate that when quality of service
is negatively affected by a labour stoppage, the
CRTC will impose penalties only where a telephone
company has been found to have violated labour
relations law or policy, or where it has
deliberately sacrificed quality of service to
increase profits. The application also seeks a
remedial order to recover the cost of the credits
already provided to customers. It is likely that
the CRTC will not deal with Bell Canada&#146;s
December&nbsp;5, 2005 application until it reaches a
decision on Bell Aliant&#146;s review and vary
application. Furthermore, the Federally Regulated
Employers &#150; Transportation and Communications
(FETCO), a national organization representing
employers and employer associations across
Canada, filed a petition with the
Governor-in-Council to vary or rescind Telecom
Decision 2006-27 on the basis that it oversteps
the CRTC&#146;s jurisdiction and puts at risk
well-balanced and well-defined Canadian labour
relations policies and law.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 45
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">APPLICATION TO CHANGE BUNDLING RULES
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;2, 2005, Bell Canada applied to
the CRTC to modify the bundling rules that apply
to customer-specific arrangements (CSAs). CSAs
are arrangements tailored to a particular
customer&#146;s needs for the purpose of customizing
the offering in terms of rate structure and
levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The CRTC currently requires any CSA
involving both tariffed and non-tariffed services
(Mixed CSAs) to be filed for approval with the
CRTC before it can be provided to customers. Bell
Canada&#146;s proposal would exempt a Mixed CSA from
the bundling rules and associated tariff
requirements if total revenue from the CSA is
higher than the price of the tariffed components
of the CSA and the CSA is not part of a practice
designed to circumvent tariffs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada&#146;s and Bell Aliant&#146;s flexibility
to compete may continue to be encumbered if the
proposal is not approved.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BELL EXPRESSVU
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November&nbsp;2006, the CRTC held a public
hearing to review certain aspects of the
regulatory framework for over-the-air
broadcasters. Among the issues addressed was the
possibility of requiring cable and satellite
operators to pay over-the-air broadcasters for
the right to carry their signals. Under the
current copyright and regulatory framework, the
broadcasters are not compensated by cable and
satellite operators for distribution of their
signals. Bell ExpressVu, along with the cable
operators, argued vigorously against a
fee-for-carriage regime. A decision from the CRTC
requiring cable and satellite operators to pay
over-the-air broadcasters could have a negative
effect on our business and results of operations.
A decision is expected in the second quarter of
2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December&nbsp;2006, the Federal Court of
Canada ruled that the licence fees, levied by the
CRTC to recover Industry Canada costs associated
with broadcasting spectrum management and paid by
broadcasters and broadcast distributors, are an
illegal tax. These fees represent 1.365% of Bell
ExpressVu&#146;s annual revenue. The Court&#146;s decision
is being appealed by the federal government and
the Canadian Association of Broadcasters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">LICENCES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Companies must have a spectrum licence to
operate cellular, PCS and other
radio-telecommunications systems in Canada. The
Minister of Industry awards spectrum licences,
through a variety of methods, at his or her
discretion under the <I>Radiocommunication Act</I>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While we expect that the licences under
which we provide cellular and PCS services will
be renewed at term, there is no assurance that
this will happen. Industry Canada can revoke a
company&#146;s licence at any time if the company does
not comply with the licence&#146;s conditions. While
we believe that we comply with the conditions of
our licences, there is no assurance that Industry
Canada will agree. Should there be a
disagreement, this could have a material and
negative effect on us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">WIRELESS AND RADIO TOWERS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2005, Industry Canada released a
report concerning its procedures for approving
and placing wireless and radio towers in Canada,
including the role of municipal authorities in
the approval process. Among other things, the
report recommends that the authority to regulate
the siting of antennae and supporting structures
remain exclusively with the Government of Canada.
In August&nbsp;2005, Industry Canada presented a
revised draft policy for comment. The wireless
and broadcasting industries both have a number of
concerns with the draft policy and are now
working with Industry Canada to attempt to
resolve these concerns. However, there has been
no recent activity on this issue and it is not
possible to predict at this time if or when the
final policy will be issued. If the final policy
requires more municipal or public consultation in
the approval process, there is a risk that it
could significantly slow the expansion of
wireless networks in Canada. This could have a
material and negative effect on our operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">MOBILE SPECTRUM
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;16, 2007, Industry Canada
initiated a consultation that could result in the
licensing of additional mobile spectrum for
advanced wireless services in the 1.6, 1.7 and
2.1 GHz bands. The consultation could also make
an additional 10 MHz of PCS spectrum available in
the 1.9 GHz band. In total, the consultation
could make
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">46 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">105 MHz of spectrum available, to be licensed
through a competitive spectrum auction likely
occurring in early 2008. The consultation seeks
comments on a variety of policy and technical
issues related to the spectrum, including whether
any of the spectrum should be set aside for new
entrants. Industry Canada is also seeking
comments on whether spectrum caps could be used
as an alternative method of facilitating new
competitive entry into the Canadian wireless
market. Furthermore, Industry Canada is seeking
comments concerning the policies related to
wireless antennae towers, and whether digital
roaming should be mandated among all carriers.
The adoption of such measures would strongly
facilitate the introduction of new competitor(s)
into the Canadian wireless market and would
heighten the degree of competition in the already
highly competitive wireless segment. Comments are
due to be filed with Industry Canada by May&nbsp;25,
2007 with reply comments due by June&nbsp;27, 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Assumptions
and Risks Underlying Our
Forward-Looking Statements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ASSUMPTIONS MADE IN THE PREPARATION OF
FORWARD-LOOKING STATEMENTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Forward-looking statements for 2007 made in
BCE&#146;s 2006 annual report, including in this MD&#038;A,
are based on a number of assumptions that we
believed were reasonable on the day we made the
forward-looking statements. This section outlines
assumptions for 2007 that we made in addition to
those set out in other sections of this MD&#038;A. If
our assumptions turn out to be inaccurate, our
actual results could be materially different from
what we expect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Canadian Economic Assumptions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; Canadian GDP growth &#150; essentially in
line with GDP growth in 2006, consistent with
estimates set by the Conference Board of Canada
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; Canadian business prime rate and
Consumer Price Index (estimated by Statistics
Canada) &#150; to decline from their 2006&nbsp;year-end
levels.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Canadian Market Assumptions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; revenue growth in the overall Canadian
telecommunications market &#150; in line with expected
Canadian GDP growth
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; residential
wireline voice services revenues &#150; to continue to
decrease due to wireless substitution,
competition from cable companies and other
factors such as e-mail and instant messaging
substitution
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; intense wireline
competition in both the business and residential
telecommunications markets &#150; to continue mainly
from cable companies
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; growth in revenues for
the Canadian wireless and video markets &#150; similar
to the rate of growth in 2006
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; growth in
revenues for the Canadian Internet market &#150;
slightly lower than the rate of growth in 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Operational and Financial Assumptions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Operational</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; growth in the number of our wireless,
video and high-speed Internet subscribers as well
as higher ARPU for these services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; the
rate of losses in our residential NAS to
stabilize compared to 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Financial</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Financial assumptions applicable to BCE Inc.
include the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; the incurrence
of restructuring costs related to employee
reductions in certain areas of the business and
staff relocations to reduce the level of leased
office space
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; the increase in
amortization expense as a result of capital
spending that has been higher than asset
retirements over the past few years
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; BCE&#146;s effective tax rate to increase as
the 2006 effective tax rate benefited from
one-time adjustments that are not applicable in
2007
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; no significant escalation in cash
taxes as we accelerate the use of Bell Canada&#146;s
research and development tax credits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">In addition, financial assumptions applicable to
Bell Canada (excluding Bell Aliant) include the
following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; total net benefit plans cost
to decrease mainly as a result of improved
returns on plan assets and changes to benefit
plans
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; funding of our total net benefit
plans to decrease due to improved returns on plan
assets and contributions made in 2006
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;
capital intensity targeted at levels similar
to 2006
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; further productivity
improvements related to internal process redesign
and supply transformation initiatives.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 47
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Assumptions about Transactions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;BCE Inc. to repurchase up to 5% of its
common shares under its previously announced
NCIB.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;BCE Inc. to close the previously
announced sale of Telesat in mid-2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RISKS THAT COULD AFFECT
OUR BUSINESS AND RESULTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section describes the principal risks
that could affect our business and results, in
addition to those described elsewhere in this
MD&#038;A, including, in particular, those previously
described under <I>Competitive Environment </I>and
<I>Regulatory Environment</I>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A risk is the possibility that an event
might happen in the future that could have a
negative effect on our financial condition,
results of operations or business. Part of
managing our business is to understand what these
potential risks could be and to mitigate them
where we can (see <I>Risk Management Practices</I>
below).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The actual effect of any event on our
business and results could be materially
different from what we currently anticipate. In
addition, this description of risks does not
include all possible risks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of BCE Inc.&#146;s strategy of
concentrating on Bell Canada&#146;s communications
business and the recently completed and announced
dispositions of BCE Inc.&#146;s non-core assets, BCE
Inc.&#146;s financial performance now depends on how
well Bell Canada performs financially.
Accordingly, the risk factors described in this
MD&#038;A mainly relate to the operations and
businesses of Bell Canada and its subsidiaries
and joint ventures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Economic and Market Conditions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our business is affected by general economic
conditions, consumer confidence and spending, as
well as the demand for, and prices of, our
products and services. If there is a decline in
economic growth and in retail and commercial
activity, there could be a lower demand for our
products and services. During these periods,
customers may delay buying our products and
services, reduce purchases or discontinue using
them.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weak economic conditions could lower our
profitability and reduce cash flows from
operations. They also could negatively affect the
financial condition and creditworthiness of our
customers,
which could increase uncertainty about our
ability to collect receivables and potentially
increase our bad debt expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Strategies and Plans
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We continue to implement our strategy of
delivering unrivalled integrated communications
services to our customers across Canada.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our strategic direction requires us to
continue to transform our cost structure and the
way in which we serve customers in the context of
the competitive and regulatory environment
previously described. This means we will need to
continue to:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;respond by adapting to
these changes and making any necessary shifts in
employee skills. If our management, processes or
employees are not able to adapt to these changes,
our business and financial results could be
materially and negatively affected
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;invest capital to implement our strategies
and operating priorities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The actual amount of capital required and the
returns from these investments could, however,
differ materially from our current expectations.
In addition, we may not have access to capital on
attractive terms when we need it.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not achieving our business objectives could
have a material and negative impact on our
financial performance and growth prospects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Transforming Our Cost
Structure
and Containing Capital Intensity
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our strategies and operating priorities,
along with mandated price reductions, require us
to continue to transform our cost structure.
Accordingly, we are continuing to implement
several productivity improvements and initiatives
to reduce costs while containing our capital
expenditures. Our objectives for cost
reduction/productivity improvements continue to
be aggressive and there is no assurance that we
will be successful in reducing costs. There will
be a material and negative effect on our
profitability if we do not successfully maintain
the quality of our service while managing our
capital expenditures and implementing these cost
reduction initiatives and productivity
improvements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">48 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many productivity improvements and cost
reduction initiatives require capital
expenditures to implement systems that automate
or enhance our operations. There is no assurance
that these investments will be effective in
delivering the planned productivity improvements
and cost reductions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Improved customer service is critical to
increasing customer retention and ARPU. It may,
however, be difficult to improve customer service
while significantly reducing costs. If we are
unable to achieve either or both of these
objectives, it could have a material and negative
effect on our results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Anticipating Technological Change and
Investing in New Technologies, Products and
Services
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We
operate in markets that are affected by constant
technological change, evolving industry
standards, changing client needs, frequent
introductions of new products and services, and
short product life cycles. Investment in new
technologies, products and services and the
ability to launch, on a timely basis, such
technologies, products and services are critical
to increasing the number of our subscribers and
achieving our financial performance targets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may face additional risks as we develop
new products, services and technologies, and
update our networks to stay competitive. Newer
technologies, for example, may quickly become
obsolete or may need more capital than expected.
Development could be delayed for reasons beyond
our control. Substantial investments usually need
to be made before new technologies prove to be
commercially viable. There is also a significant
risk that current regulation could be expanded to
apply to newer technologies. A regulatory change
could delay our launch of new services and
restrict our ability to market these services if,
for example, new pricing rules or marketing or
bundling restrictions are introduced, or existing
ones are extended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are in the process of moving traffic on
our core circuit-based infrastructure to IP
technology. As part of this move, we are in the
process of discontinuing certain services that
are based on circuit-based infrastructure. This
is a necessary component of improving capital and
operating efficiencies. In some cases, this could
be delayed or prevented by customers or
regulatory actions. If we cannot discontinue
these services as planned, we will not be able to
achieve the efficiencies as expected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no assurance that we will be
successful in developing, implementing and
marketing new technologies, products, services or
enhancements in a reasonable time, or that they
will have a market. New products or services that
use new or evolving technologies could reduce
demand for our existing offerings or cause prices
to fall.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Events Affecting Our Networks
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Network failures could materially hurt our
business, including our customer relationships
and our operating results. Our operations depend
on how well
we protect our networks, equipment, applications
and the information stored in our data centres
against damage from fire, natural disaster, power
loss, hacking, computer viruses, disabling
devices, acts of war or terrorism and other
events. Our operations also depend on timely
replacement and maintenance of our networks and
equipment. Any of these events could cause our
operations to be shut down indefinitely.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our networks are connected with the networks
of other telecommunications carriers, and we rely
on them to deliver some of our services. Any of
the events mentioned in the previous paragraph,
as well as strikes or other work disruptions,
bankruptcies, technical difficulties or other
events affecting the networks of these other
carriers, could also hurt our business, including
our customer relationships and our operating
results. In addition, we have outsourced certain
services to providers that operate outside of
Canada. Although we have redundancy and network
monitoring systems in place, a major natural
disaster that affects the regions in which our
service providers operate, or other events
adversely affecting the business or operations of
such service providers, could have a material and
negative effect on our service levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cisco Systems Inc. (Cisco) recently issued
three security advisories that may affect certain
of our customers with Cisco routers running on
the Internetwork Operating System. Bell Canada is
working closely with Cisco to mitigate potential
effects of these vulnerabilities.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 49
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Software
and System Upgrades</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Many aspects of our business, such as
providing telecommunication services and customer
billing, among others, depend to a large extent
on various IT systems and software, which must be
improved and upgraded regularly and replaced from
time to time. Implementing system and software
upgrades and conversions is a complex process,
which may have several adverse consequences,
including billing errors and delays in customer
service. Any of these events could significantly
damage our customer relationships and business
and have a material and negative effect on our
results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Renegotiating Labour Agreements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Approximately 46% of our employees are
represented by unions and are covered by
collective agreements. Renegotiating collective
agreements could result in higher labour costs
and work disruptions, including work stoppages or
work slowdowns. Difficulties in
renegotiations or other labour unrest could
significantly hurt our business, operating
results and financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There can be no assurance that if a strike
or other work disruption occurs it would not
adversely affect service to our customers. In
addition, work disruptions at our service
providers, including work slowdowns and work
stoppages due to strikes, could significantly
hurt our business, including our customer
relationships and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The collective agreements between the CEP
and Expertech representing approximately 160
clerical and 1,300 craft and services employees
both expired on November&nbsp;30, 2006. The parties
have been in negotiations since November&nbsp;2006. A
first offer by Expertech was rejected by both
bargaining units&#146; employees on December&nbsp;20, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;26, 2007, the craft and services
employees rejected Expertech&#146;s final offer at
64.5% whereas its clerical employees accepted the
offer at 78.3%. Expertech&#146;s craft and services
employees will only obtain their right to strike
if and once the CEP gives 72 hour notice to
Expertech indicating the date after which a
strike will occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of this vote, Expertech declared
it was unable to restructure its operations and
announced the wind-down of its operations. Bell
Canada announced that it would work with
Expertech toward an orderly and timely wind-down
of its activities and would transfer its work to
many local suppliers in Qu&#233;bec and Ontario.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;5, 2007, the CEP and Expertech
announced that an agreement had been reached on
some refinements to Expertech&#146;s final offer that,
if accepted by union members, would allow
Expertech to avoid closure. This offer has been
put to a vote by the craft and services
employees. The results will be announced on March
19, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of the bargaining process, the CEP
filed, in December&nbsp;2006, a single employer and a
sale of business application before the Canada
Industrial Relations Board (CIRB)&nbsp;against Bell
Canada and Expertech. Hearings are scheduled in
May and June&nbsp;2007. Should the CEP be successful
with these applications, Bell Canada could be
bound by the collective agreements now covering
Expertech&#146;s employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An arbitration decision was received by
Expertech in December&nbsp;2006 under which it was
ordered to make the Bell Canada 2004 VER program
available to all employees covered by the craft
and services collective agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following important collective
agreements will expire in 2007:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;the
collective agreement between Bell Canada and the
CEP representing approximately 6,000 craft and
services employees will expire on November&nbsp;30,
2007
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;the collective agreement between
Bell Aliant and the CEP representing
approximately 660 craft and services employees in
Qu&#233;bec and Ontario will expire on November 30,
2007
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;the collective agreement between
Bell Aliant and the CEP representing
approximately 3,500 craft employees, clerical
employees and operators in the four Atlantic
provinces will expire on December&nbsp;31, 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Epidemics and Pandemics and Other Health
Risks
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Epidemics (e.g. SARS) and pandemics, as
well as other health risks, could occur and
impact our operations. Our operations depend on
timely replacement and maintenance of our
networks and equipment (refer to <I>Events Affecting
Our Networks </I>above) and our ability to service
our customers. In certain aspects of our solution
delivery we rely on third parties for services.
Should an influenza pandemic occur it is possible
that we would be unable to maintain the network
and service our customers in a timely manner,
resulting in an interruption or failure of
certain of our normal business functions or
operations, which could have a material adverse
effect on our results of operations, liquidity or
financial condition. We are taking appropriate
prudent measures to mitigate these risks.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">50&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Health Concerns about Radio Frequency
Emissions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">It has been suggested that some
radio frequency emissions from cellphones may be
linked to certain medical conditions. Interest
groups have also requested investigations into
claims that digital transmissions from handsets
used with digital wireless technologies pose
health concerns and cause interference with
hearing aids and other medical devices. This
could lead to additional government regulation,
which could have a material and negative effect
on our business. In addition, actual or perceived
health risks of wireless communications devices
could result in fewer new network subscribers,
lower network usage per subscriber, higher churn
rates, product liability lawsuits or less outside
financing being available to the wireless
communications industry. Any of these could have
a material and negative effect on our wireless
business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Potential Legislation
Restricting In-Vehicle Use of
Cellphones
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some studies suggest that using cellphones
while driving may result in more motor vehicle
collisions. It is possible that this could lead
to new regulations or legislation banning the use
of handheld cellphones while driving, as it has
in Newfoundland and Labrador and in several U.S.
states, or other restrictions on in-vehicle use
of wireless devices. If any of these happen,
cellphone use in vehicles may decline, which may
negatively affect our wireless business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Bell ExpressVu
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell ExpressVu currently uses four satellites
&#150; Nimiq 1, Nimiq 2, Nimiq 3 and Nimiq 4-Interim &#150;
for its video services. An additional satellite
has been leased and is expected to be brought
into service in the second quarter of 2007 to
replace Nimiq 4-Interim, which is close to the
end of its use. Telesat, a subsidiary of BCE
Inc., operates or directs the operation of these
satellites.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satellites are subject to significant risks
(refer to the section below entitled <I>Telesat </I>for
more details concerning such risks). Any loss,
failure, manufacturing defects, damage or
destruction of these satellites, of Bell
ExpressVu&#146;s terrestrial broadcasting
infrastructure, or of Telesat&#146;s tracking,
telemetry and control facilities to operate the
satellites, could have a material and negative
effect on Bell ExpressVu&#146;s results of operations
and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell ExpressVu is subject to programming and
carriage requirements under CRTC regulations.
Changes to the regulations that govern
broadcasting could negatively affect Bell
ExpressVu&#146;s competitive position or the cost of
providing its services. Bell ExpressVu&#146;s DTH
satellite television distribution undertaking
licence was renewed in March&nbsp;2004 and expires on
August&nbsp;31, 2010. While we expect this licence
will be renewed at term, there is no assurance
that this will happen.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell ExpressVu will require additional
satellite capacity to meet the bandwidth
requirements for additional high definition (HD)
channels in the future. Bell ExpressVu has
supported Telesat&#146;s application to Industry
Canada for additional satellite spectrum licences
to facilitate the additional satellite capacity.
If Telesat is unsuccessful in obtaining such
additional spectrum licences, Bell ExpressVu may
not have access to the necessary satellite
capacity to launch the number of HD channels
contemplated by its business plan, which could
have a material and negative effect on Bell
ExpressVu&#146;s business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell ExpressVu and Bell Canada continue to
face competition from unregulated U.S. DTH
satellite
television services that are sold illegally
in Canada. In response, they are participating in
legal actions that are challenging the sale of
U.S. DTH satellite television equipment in
Canada. This competition could have a material
and adverse impact on the business of Bell
ExpressVu and Bell Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell ExpressVu faces a loss of revenue
resulting from the theft of its services. Bell
ExpressVu introduced a smart card swap for its
authorized digital receivers that is designed to
block unauthorized reception of Bell ExpressVu&#146;s
signals. The smart card swap was introduced in
phases and was completed in July&nbsp;2005. As with
any technology-based security system, it is not
possible to eliminate with absolute certainty a
compromise of that security system. As is the
case for all other pay television providers, Bell
ExpressVu has experienced, and continues to
experience, ongoing efforts to steal its services
by way of compromise of Bell ExpressVu&#146;s signal
security systems.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;28, 2004, the Court of Qu&#233;bec
ruled in <I>R. v. D&#146;Argy and Theriault (D&#146;Argy Case)</I>
that the provisions in the <I>Radiocommunication Act</I>
making it a criminal offence to manufacture,
offer for sale or sell any device used to decode
an encrypted subscription signal relating to the
unauthorized reception of satellite signals
violate the freedom of expression rights
enshrined in the <I>Charter</I>. This decision has been
overruled by the Qu&#233;bec
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 51
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Superior Court and the Qu&#233;bec Court of Appeal
has upheld the Superior Court&#146;s decision. The
defendants are now seeking leave to appeal to the
Supreme Court of Canada. Should leave to appeal
be granted and should the ruling of the Qu&#233;bec
Court of Appeal be overruled by the Supreme Court
of Canada and Parliament does not enact new
provisions criminalizing the unauthorized
reception of satellite signals, Bell ExpressVu
could face increasing loss of revenue from the
unauthorized reception of satellite signals.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Liquidity
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to meet our financial obligations
and provide for planned growth depends on our
sources of liquidity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our cash requirements may be affected by the
risks associated with our contingencies,
off-balance sheet arrangements, derivative
instruments and assumptions built into our
business plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, we finance our capital needs in
four ways:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>from cash generated by our
operations or investments</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by borrowing
from commercial banks</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through debt and
equity offerings in the capital markets</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by selling or otherwise disposing of assets
(including accounts receivable).</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Financing through equity offerings would dilute
the holdings of existing equity investors. An
increased level of debt financing could lower our
credit ratings, increase our borrowing costs and
give us less flexibility to take advantage of
business opportunities or meet our financial
obligations. Business acquisitions could also
lower our credit ratings and have similar adverse
consequences.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to raise financing depends on
our ability to access the capital markets and the
syndicated commercial loan market. The cost and
amount of funding depend largely on market
conditions, and the outlook for our business and
credit ratings at the time capital is raised. If
our credit ratings are downgraded, our cost of
funding could significantly increase and the
amount of funding available could be reduced. In
addition, participants in the capital and
syndicated commercial loan markets have internal
policies limiting their ability to invest in, or
extend credit to, any single borrower or group of
borrowers or to a particular industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc. and some of its subsidiaries have
entered into credit facilities with various
financial institutions. They include credit
facilities supporting commercial paper programs.
There is no assurance that these facilities will
be renewed on favourable terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We need significant amounts of cash to
implement our business plan. This includes cash
for capital expenditures to provide our services,
payment of our contractual obligations, including
repayment of our outstanding debt, payment of
dividends to shareholders and share buybacks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we cannot raise the capital we need upon
acceptable terms, we may have to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limit
our ongoing capital expenditures</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limit
our investment in new businesses</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limit
the size of our share buyback program</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>try to raise additional capital by selling or
otherwise disposing of assets.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Any of these could have a material and negative
effect on our cash flow from operations and on
our growth prospects.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;18, 2006, BCE Inc. announced the
sale of its satellite services subsidiary
Telesat. BCE Inc.&#146;s 2007 financial plan assumes
completion of the above-mentioned sale of
Telesat. However, this transaction will take
several months to complete and remains subject to
a number of approvals and closing conditions,
including approval by Industry Canada
and the United States Federal Communications
Commission and other closing conditions that are
customary in a transaction of this nature,
including the absence of a material adverse
change affecting Telesat&#146;s business and the
ability of the purchaser to draw on its committed
financing to raise the proceeds needed to pay BCE
Inc. BCE Inc.&#146;s inability to complete the
proposed transaction would have an adverse effect
on its liquidity and 2007 financial plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Litigation, Regulatory Matters and Changes
in Laws
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Regulatory initiatives or proceedings and
pending or future litigation, including the
increase in class action claims, could have a
material and negative effect on our businesses,
operating results and financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in laws or regulations or in how
they are interpreted, and the adoption of new
laws or regulations, could also materially and
negatively affect us. These include changes in
tax laws or the adoption of new tax laws that
result in higher tax rates or new taxes. They
also include recent amendments to the securities
laws of certain provinces of Canada which
introduced statutory civil liability for
misrepresentations in continuous disclosure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">52&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of the principal legal
proceedings involving us, please refer to the BCE
2006 AIF under the heading <I>Legal Proceedings we
are involved in</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of certain regulatory
initiatives and proceedings affecting us, please
see the section entitled
<I>Regulatory Environment</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Pension Fund Contributions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The funding status of our pension plans
resulting from future valuations of our pension
plan assets and liabilities depends on a number
of factors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actual returns on pension plan assets</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>long-term interest rates</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in pension regulations.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These factors could require us to increase
contributions to our defined benefit pension
plans in the future and therefore could have a
material and negative effect on our liquidity and
results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BCE Inc.&#146;s Sources of Income and Assets
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. has no material sources of income or
assets of its own, other than the interests that
it has in its subsidiaries, joint ventures and
significantly influenced companies, including its
ownership of all of the outstanding common shares
of Bell Canada. BCE Inc.&#146;s cash flow and,
consequently, its ability to service its
indebtedness and to pay dividends on its equity
securities are therefore dependent upon the
ability of its subsidiaries, joint ventures and
significantly influenced companies to pay
dividends or otherwise make distributions to it.
As a result of BCE Inc.&#146;s strategy of focusing on
its communications business, the business of Bell
Canada now represents, and is expected in the
future to continue to represent, substantially
all of BCE Inc.&#146;s business and investment
activity. Therefore, BCE Inc.&#146;s financial
performance is, and is expected to continue to
be, dependent on the operations and financial
performance of Bell Canada. BCE Inc.&#146;s
subsidiaries, joint ventures and significantly
influenced companies are separate and distinct
legal entities and have no obligation, contingent
or otherwise, to pay any dividends or make any
other distributions to BCE Inc. In addition, any
right of BCE Inc. to receive assets of its
subsidiaries, joint ventures and significantly
influenced companies upon their liquidation or
reorganization will be structurally subordinated
to the prior claims of creditors of such
subsidiaries, joint ventures and significantly
influenced companies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dividend Policy
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;12, 2006, BCE Inc. announced the
establishment of a dividend policy based on a
target dividend payout percentage range of
earnings per share before net gains (losses)&nbsp;on
investments and restructuring costs. However,
based on the prevailing competitive and
technological environment at any given time,
there can be no guarantee that BCE Inc.&#146;s
dividend policy will be maintained. Refer to the
sections above entitled <I>Anticipating
Technological Change and Investing in New
Technologies, Products and Services </I>and <I>Liquidity</I>
as well as to the section entitled <I>Competitive
Environment </I>for more information on these risks
and their potential impact on our businesses,
revenues, cash flows and capital expenditures,
which in turn could adversely affect BCE Inc.&#146;s
ability to maintain its dividend policy.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Bell Aliant Cash
Distributions and Tax Treatment
of Income Trusts
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although Bell Aliant intends to make cash
distributions to its unitholders, including BCE,
there can be no guarantee regarding the amounts
of these cash distributions, which may fluctuate
with Bell Aliant&#146;s performance. Bell Aliant also
has the discretion to establish cash reserves for
the proper conduct of its business which would
reduce the amount of cash otherwise available for
distributions in that year. Accordingly, there
can be no assurance regarding the actual levels
of distributions by Bell Aliant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;31, 2006, the federal government
announced significant changes to the tax
treatment of income trusts. Effective in 2011,
income trusts that were publicly traded before
November&nbsp;2006, like Bell Aliant, will be subject
to taxation at corporate tax rates and certain
distributions to unitholders will be taxed like
dividends received from a corporation. All else
being equal, the taxation of income trusts at
corporate tax rates may result in less cash being
available to pay distributions by Bell Aliant.
The federal government specified at that time
that while there was no intention to prevent
existing income trusts from normal growth during
the transitional period, any undue expansion of
an existing income trust before 2011 would make
the new rules effective immediately.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;15, 2006, the federal government
issued a release clarifying what would be
considered undue expansion. In that release, the
government stated that it would not recommend any
change to the 2011 effective date in respect of
any existing income trust whose equity
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 53
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">capital grew as a result of issuances of new
equity in any of the intervening periods by an
amount that did not exceed the greater of $50
million and a safe harbour amount. The safe
harbour amount is to be measured by reference to
an income trust&#146;s market capitalization as of the
end of trading on October&nbsp;31, 2006. Market
capitalization is to be measured in terms of the
value of an income trust&#146;s issued and outstanding
publicly traded units. For this purpose, it would
not include debt (whether or not that debt
carried a conversion right or was itself publicly
traded), options or other interests that were
convertible into units of the income trust. For
the period from November&nbsp;1, 2006 to the end of
2007, an income trust&#146;s safe harbour will be 40%
of that October&nbsp;31, 2006 benchmark. An income
trust&#146;s safe harbour for each of the 2008 through
2010 calendar years will be 20% of that
benchmark, allowing cumulative growth of up to
100% over the four-year transition period. The
release also indicated that the merger of two or
more income trusts, each of which was publicly
traded on October&nbsp;31, 2006, or a reorganization
of such an income trust, would not be considered
growth to the extent that there was no net
addition to equity as a result of the merger or
reorganization. Based on the release, the
privatization of Bell Nordiq Income Fund and the
proposed acquisition of Amtelecom Income Fund
should not represent &#145;undue expansion&#146;. The
release also indicated that conversions of income
trusts back to corporations would be allowed to
take place without any tax consequences to
investors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the government announcements to
date, it is anticipated that distributions will
be impacted by taxation in 2011 or earlier if it
is determined that Bell Aliant has experienced
undue expansion prior to 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However, the exact legislation that will
implement the release has not been made public so
there is uncertainty as to the reach and
application of this announcement. It is therefore
possible that the anticipated new tax measures
for existing income trusts may be different from
what was announced and which could result in,
amongst other things, the earlier application of
these measures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Stock Market Volatility
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Differences between BCE Inc.&#146;s actual or
anticipated financial results and the published
expectations of financial analysts may
contribute to volatility in BCE Inc.&#146;s
securities. A major decline in the capital
markets
in general, or an adjustment in the market price
or trading volumes of BCE Inc.&#146;s securities, may
materially and negatively affect our ability to
raise capital, issue debt, make strategic
acquisitions or enter into joint ventures.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Acquisitions and Dispositions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our business plans include making strategic
acquisitions and entering into joint ventures. We
also from time to time dispose of assets or all
or part of certain businesses. There is no
assurance that we will find suitable companies to
acquire or partner with, or that we will have the
financial resources needed to complete any
acquisition or enter into any joint venture.
There could also be difficulties in integrating
the operations of acquired companies with our
existing operations or in operating joint
ventures. There is also no assurance that we will
be able to complete any announced dispositions or
that we will use the funds received as a result
of such dispositions for any specific purpose
that may be publicly anticipated.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions and dispositions may be subject
to various conditions, such as approvals by
regulators and holders of our securities and
other closing conditions, and there can be no
assurance that, with respect to any specific
acquisition or disposition, all such conditions
will be satisfied.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Telesat
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Satellite Industry Risks</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Satellites utilize highly complex technology
and operate in the harsh environment of space and
therefore are subject to significant operational
risks while in orbit. The risks include in-orbit
equipment failures, malfunctions and other kinds
of problems commonly referred to as anomalies
that could reduce the satellites&#146; commercial
lives. Acts of war or terrorism, magnetic,
electrostatic or solar storms, and space debris
or micrometeoroids could also damage Telesat&#146;s
satellites. Any single anomaly or series of
anomalies or other failure (whether full or
partial) of one of Telesat&#146;s satellites could
cause its revenues, cash flows and backlog to
decline materially, could require Telesat to
repay prepayments made by customers of the
affected satellite and could materially and
adversely affect its relationships with current
customers and its ability to attract new
customers for satellite services. A failure could
result in a customer terminating its contract for
service on the affected satellite.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Launch Failures</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Satellites are subject to certain risks
related to failed launches. Launch vehicles may
fail resulting in significant delays in the
deployment of satellites because of the need to
construct replacement satellites, which typically
takes up to 30&nbsp;months or longer, and to obtain
another launch vehicle. Such significant delays
could materially and adversely affect operations,
revenues, cash flows and backlog.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">54&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Construction and Launch Delays</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The launch of satellites is subject to
certain delays. Launch delays can result from
delays in the construction of satellites and
launch vehicles, the periodic unavailability of
reliable launch opportunities, possible delays in
obtaining regulatory approvals and launch
failures. If satellite construction schedules are
not met, a launch opportunity may not be
available at the time the satellite is ready to
be launched. Delays in the commencement of
service could enable customers who have
contracted for transponder capacity to terminate
their contracts, could affect plans to replace an
in-orbit satellite prior to the end of its useful
life, could result in the expiration or
cancellation of launch insurance and could result
in the loss of orbital rights. The failure to
implement a satellite deployment plan on schedule
could have a material adverse effect on Telesat&#146;s
financial condition and results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Market for Satellite Insurance</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Telesat&#146;s current satellite insurance does
not protect it against all satellite-related
losses that it may experience, and it does not
have in-orbit insurance coverage for all of the
satellites in its fleet. The insurance will not
protect Telesat against business interruption,
lost revenues or delay of revenues. To the extent
Telesat experiences a launch or in-orbit failure
that is not fully insured, or for which insurance
proceeds are delayed or disputed, it may not have
sufficient resources to replace the affected
satellite.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RISK MANAGEMENT PRACTICES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s audit committee (Audit Committee)
is responsible for the oversight of our risk
management processes. Such processes are designed
to manage, rather than eliminate, the risk of
failure to achieve our business objectives. The
Audit Committee also takes into account
significant social, environmental and ethical
matters that relate to our business and reviews
annually our corporate social responsibility
program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have enterprise-wide risk assessment
processes which incorporate the internal control
and enterprise risk management frameworks of the
Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Risk assessment and
evaluation is an important part of the annual
business planning cycle. In developing their
annual plans, BCE&#146;s business units identify and
assess significant risks to the achievement of
their business objectives and where necessary
develop mitigation plans. The risk information
generated is reviewed with senior management and
BCE Inc.&#146;s board of directors in evaluating the
business plans for each of the business units and
the company as a whole. The Internal Audit group
plans its annual activities employing a
risk-based review of internal control processes
in the company. Throughout the year the Internal
Audit group carries out continuing assessments of
the quality of controls. On a quarterly basis the
Internal Audit group reports to the Audit
Committee on the status of adherence to our
internal control policies and on areas identified
for specific improvement. The Internal Audit
group also promotes effective risk management in
our lines of business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee considers the
effectiveness of the operation of our internal
control procedures, reviewing reports from the
Internal Audit group and BCE Inc.&#146;s external
auditors. The Audit Committee reports its
conclusions to BCE Inc.&#146;s board of directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><b>Our
Accounting Policies</b>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>This section discusses key estimates and
assumptions that management has made and how they
affect the amounts reported in the financial
statements and notes. It also describes the key
changes in accounting standards and our
accounting policies, and how they affect our
financial statements.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>We have prepared our consolidated financial
statements according to Canadian generally
accepted accounting principles (GAAP). Other
significant accounting policies, not involving
the same level of measurement uncertainty as
those discussed in this section, are nevertheless
important to an understanding of our financial
statements. Estimates related to revenues,
allowance for doubtful accounts, useful lives of
capital assets, asset impairments, inventory
reserves, employee compensation plans, evaluation
of minimum lease terms for operating leases, and
business combinations require difficult judgments
on complex matters that are often subject to
multiple sources of authoritative guidance. There
were no significant changes to the estimates we
made in the past two years. See Note 1 to the
consolidated financial statements for more
information about the accounting principles we
used to prepare our financial statements.</I>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 55
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">CRITICAL ACCOUNTING ESTIMATES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As required under Canadian GAAP, we make
estimates when we account for and report assets,
liabilities, revenues and expenses, and disclose
contingent assets and liabilities in our
financial statements. We are also required to
regularly evaluate the estimates that we make.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We base our estimates on a number of
factors, including historical experience, current
events and actions that we may undertake in the
future, and other assumptions that we believe are
reasonable based on information available at the
time they are made. Given the inherent
uncertainty involved in making estimates, actual
results reported in future periods could differ
from these estimates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We consider the estimates described in this
section to be an important part of understanding
our financial statements because they require
management to make assumptions about matters that
are highly uncertain at the time the estimate was
made and changes to these estimates could have a
material impact on our financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our senior management has discussed the
development and selection of the critical
accounting estimates described in this section
with the Audit Committee of our board of
directors. The Audit Committee has reviewed these
critical accounting estimates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any sensitivity analysis included in this
section should be used with caution as the
changes are hypothetical and the impact of
changes in each key assumption may not be linear.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Employee Benefit Plans
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>We maintain defined benefit plans that
provide pension and other post-employment
benefits for most of our employees. The amounts
reported in the financial statements relating to
these benefits are determined using actuarial
calculations that are based on several
assumptions.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We perform a valuation at least every three
years to determine the actuarial present value of
the accrued pension and other retirement
benefits. The valuation uses management&#146;s
assumptions for the discount rate, expected
long-term rate of return on plan assets, rate of
compensation increase, trends in health-care
costs and expected average remaining years of
service of employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While we believe that these assumptions are
reasonable, differences in actual results or
changes in assumptions could materially affect
employee benefit obligations and future net
benefit plans costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We account for differences between actual
and assumed results by recognizing differences in
benefit obligations and plan performance over the
working lives of the employees who benefit from
the plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The two most significant assumptions used to
calculate the net employee benefit plans cost are
the discount rate and the expected long-term rate
of return on plan assets. Each of our operating
segments is affected by these assumptions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Discount Rate</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The discount rate is the interest rate used
to determine the present value of the future cash
flows that we expect will be needed to settle
employee benefit obligations. It is based on the
yield on long-term high-quality corporate fixed
income investments, with maturities matching the
estimated cash flows from the plan.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We determine the appropriate discount rate
at the end of every year. Our discount rate was
5.3% at December&nbsp;31, 2006, an increase from 5.2%
at December&nbsp;31, 2005. The following table shows
the impact of a 0.5% increase and a 0.5% decrease
in the discount rate on the net benefit plans
cost for 2007 and the accrued benefit asset at
December&nbsp;31, 2007.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">IMPACT ON</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ACCRUED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">IMPACT ON</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BENEFIT</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NET BENEFIT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ASSET AT</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">PLANS COST</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">DECEMBER 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">FOR 2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Discount rate increased to 5.8%</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(35</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other BCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(105</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Discount rate decreased to 4.8%</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(36</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other BCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(111</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">56&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although there is no immediate impact on our
balance sheet, a lower discount rate results in a
higher accrued benefit obligation and a lower
pension surplus. This means that we may have to
increase cash contributions to the plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Expected Long-Term Rate of Return</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The expected long-term rate of return is a
weighted average rate of our forward-looking view
of long-term returns on each of the major plan
asset categories in our funds.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We determine the appropriate expected
long-term rate of return at the end of every
year. We assumed an expected long-term rate of
return on plan assets of 7.5% in 2006, which is
the same as it was in 2005. The following table
shows the impact of a 0.5% increase and a 0.5%
decrease in the expected rate of return on plan
assets on the net benefit plans cost for 2007 and
the accrued benefit asset as at December&nbsp;31,
2007.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">IMPACT ON</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ACCRUED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">IMPACT ON</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BENEFIT</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NET BENEFIT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ASSET AT</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">PLANS COST</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">DECEMBER 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">FOR 2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Expected rate of return increased to 8.0%</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(25</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other BCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(71</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Expected rate of return decreased to 7.0%</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(25</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other BCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(71</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although there is no immediate impact on our
balance sheet, poor fund performance results in a
lower fair value of plan assets and a lower
pension surplus. This means that we may have to
increase cash contributions to the plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Goodwill Impairment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>We assess goodwill impairment of individual
reporting units in the fourth quarter of every
year and when events or changes in circumstances
indicate that goodwill might be impaired.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generally measure for impairment using a projected
discounted cash flow method and confirm our assessment
using other valuation methods. If the carrying value of a
reporting fair value, a valuation of the entire reporting
unit is carried out to determine the fair value of all its
assets and liabilities, including goodwill, as if we had
acquired the reporting unit. If the carrying value of the
reporting unit&#146;s record the difference as a reduction in
the amount of goodwill on the balance sheet and an
impairment charge in the statement of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We make a number of significant estimates
when calculating fair value using a projected
discounted cash flow method. These estimates
include the assumed growth rates for future cash
flows, the
numbers of years used in the cash flow
model, the discount rate and others.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that all of our estimates are
reasonable. They are consistent with our internal
planning and reflect our best estimates, but they
have inherent uncertainties that management may
not be able to control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any changes in each of the estimates used
could have a material impact on the calculation
of the fair value and resulting impairment
charge. As a result, we are unable to reasonably
quantify the changes in our overall financial
performance if we had used different assumptions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot predict whether an event that
triggers impairment will occur, when it will
occur or how it will affect the asset values we
have reported.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no impairment charges recorded in
2006 or 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Contingencies
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>We become involved in various litigation and
regulatory matters as a part of our business.
Each of our operating segments may be affected.
Pending litigation, regulatory initiatives or
regulatory proceedings represent potential
financial loss to our business.</I>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 57
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We accrue a potential loss if we believe
the loss is probable and it can be reasonably
estimated. We base our decision on information
that is available at the time. We estimate the
amount of the loss by consulting with the outside
legal counsel that is handling our defence. This
involves analyzing potential outcomes and
assuming various litigation and settlement
strategies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the final resolution of a legal or
regulatory matter results in a judgment against
us or requires us to pay a large settlement, it
could have a material and negative effect on our
results of operations, cash flows and financial
position in the period in which the judgment or
settlement occurs. Any accrual would be charged
to operating income and included in <I>Accounts
payable and accrued liabilities </I>or <I>Other
long-term liabilities</I>. Any cash settlement would
be included in cash from operating activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None of our operating segments had any
significant provisions relating to pending
litigation, regulatory initiatives or regulatory
proceedings at December&nbsp;31, 2006. We have not
made any significant changes to our estimates in
the past two years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Income Taxes
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management believes that it has adequately
provided for income taxes based on all of the
information that is currently available. The
calculation of income taxes in many cases,
however, requires significant judgment in
interpreting tax rules and regulations, which are
constantly changing. Each of our operating
segments may be affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our tax filings are also subject to audits,
which could materially change the amount of
current and future income tax assets and
liabilities. Any change would be recorded as a
charge or a credit to income tax expense. Any
cash payment or receipt would be included in cash
from operating activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no significant changes to the
estimates we made in the past two years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RECENT CHANGES TO ACCOUNTING STANDARDS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CICA issued revisions to section 3830 of the CICA
Handbook as section 3831, <I>Non-Monetary Transactions</I>, which
establishes standards for the measurement and disclosure of
non-monetary transactions. It also includes criteria for
defining &#145;commercial substance&#146; which replace the criteria for defining &#145;culmination
of the earnings process&#146; in the former section. Adopting this
section did not have a material effect on
our consolidated financial statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">FUTURE CHANGES TO ACCOUNTING STANDARDS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Accounting Changes
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CICA issued section 1506 of the CICA
Handbook, <I>Accounting Changes</I>, which describes the
criteria for changing accounting policies, along
with the accounting and disclosure for changes in
accounting policies, changes in accounting
estimates and corrections of errors. These
changes came into effect as of January&nbsp;1, 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Comprehensive Income
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CICA issued section 1530 of the CICA
Handbook, <I>Comprehensive Income</I>, which describes
how to report and disclose comprehensive income
and its components. Comprehensive income is the
change in our net assets that results from
transactions, events and circumstances from
sources other than shareholders. It includes
items that would not normally be included in net
earnings, such as:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;changes in the currency translation
adjustment relating to self-sustaining foreign
operations
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;unrealized gains or losses on
available-for-sale investments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;gains and losses on cash flow hedges.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CICA also made related changes to section
3250 of the CICA Handbook, <I>Surplus </I>(reissued as
section 3251, <I>Equity</I>) and section 1650 of the
CICA Handbook, <I>Foreign Currency Translation</I>
(reissued as section 1651, <I>Foreign Currency
Translation</I>).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;1, 2007, we report
accumulated other comprehensive income and its
components in the consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effect of adopting this section on
January&nbsp;1, 2007 was not significant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Financial Instruments
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CICA issued section 3855 of the CICA Handbook,
<I>Financial Instruments &#150; Recognition and
Measurement</I>, which describes the standards for
recognizing and measuring financial assets,
financial liabilities and derivatives.</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section requires that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;all financial assets be measured at
fair value, with some exceptions for loans and
investments that are classified as
held-to-maturity
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;all financial liabilities be measured
at fair value if they are derivatives or
classified as held for trading purposes. Other
financial liabilities are measured at their
amortized cost.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;all derivative financial
instruments be measured at fair value, even when
they are part of a hedging relationship.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">58&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>




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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CICA has also reissued section 3860 of the
CICA Handbook as section 3861, <I>Financial
Instruments &#150; Disclosure and Presentation</I>, which
establishes standards for presentation of
financial instruments and non-financial
derivatives, and identifies the information that
should be disclosed about them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effect of
adopting this section on January&nbsp;1, 2007 was not
significant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Hedges
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CICA issued section 3865 of the CICA
Handbook, <I>Hedges</I>, which describes how and when
hedge accounting can be used.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hedging is an activity used to change an
exposure to one or more risks by creating an
offset between:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;
changes in the fair
value of a hedged item and a hedging item, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; changes in the cash flows attributable
to a hedged item and a hedging item, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; changes resulting from a risk exposure
related to a hedged item and a hedging item.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under hedge accounting, all gains, losses,
revenues and expenses from the derivative and the
item it hedges are recorded in the statement of
operations in the same period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effect of
adopting this section on January&nbsp;1, 2007 was not
significant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><b>Controls
and Procedures</b>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our disclosure controls and procedures are
designed to provide reasonable assurance that
information is accumulated and communicated to
management, including BCE Inc.&#146;s Presidents and Chief Executive
Officer
(CEO)&nbsp;and Chief Financial Officer (CFO), to
allow timely decisions regarding required
disclosure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2006, an evaluation of
the effectiveness of our disclosure controls and
procedures, as defined in Rule&nbsp;13a-15(e) under
the <I>U.S. Securities Exchange Act of 1934 </I>and
under <I>Multilateral Instrument 52-109</I>, was carried
out under the supervision of and with the
participation of management, including the
President and CEO and the CFO. Based on that
evaluation, the President and CEO and the CFO
concluded that the design and operation of our
disclosure controls and procedures were effective
as at December&nbsp;31, 2006 and ensure that
information is recorded, processed, summarized
and reported within the time periods specified
under Canadian and U.S. securities laws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">INTERNAL CONTROL
OVER FINANCIAL REPORTING
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management is responsible for establishing
and maintaining adequate internal control over
financial reporting, as defined in Rule&nbsp;13a-15(f)
under the <I>U.S.
Securities Exchange Act of 1934 </I>and under
<I>Multilateral Instrument 52-109</I>. Internal control
over financial reporting is a process designed to
provide reasonable assurance regarding the
reliability of financial reporting and the
preparation of financial statements for external
purposes in accordance with GAAP. Management
evaluated the design and operation of our
internal control over financial reporting as of
December&nbsp;31, 2006, based on the framework and
criteria established in <I>Internal Control
&#150; Integrated Framework </I>issued by the COSO, and has
concluded that our internal control over
financial reporting is effective. There are no
material weaknesses that have been identified by
management.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No changes were made in our internal control
over financial reporting during the year ended
December&nbsp;31, 2006 that have materially affected,
or are reasonably likely to materially affect,
out internal control over financial reporting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><b>Non-GAAP
Financial Measures</b>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>This section describes the non-GAAP financial
measures we use in the MD&#038;A to explain our
financial results. It also provides
reconciliations of the non-GAAP financial
measures to the most comparable Canadian GAAP
financial measures.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">EBITDA
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The term EBITDA does not have any
standardized meaning according to GAAP. It is
therefore unlikely to be comparable to similar
measures presented by other companies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We use EBITDA, among other measures, to assess
the operating performance of our ongoing
businesses with-out the effects of amortization expense,
net benefit plans cost, and restructuring and
other items. 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
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&#146;s pension plans. Excluding restructuring and other items does not imply
they are necessarily non-recurring.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 59
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;s ability to service debt
and to meet other payment obligations, or as a
common measurement to value companies in the
telecommunications industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The most comparable Canadian GAAP financial
measure is operating income. The following tables
are reconciliations of operating income to EBITDA
on a consolidated basis for BCE and Bell Canada.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">BCE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,129</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,061</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net benefit plans cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>513</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">359</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>355</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EBITDA</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,329</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,234</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">BELL CANADA</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,353</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,755</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,073</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,989</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net benefit plans cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>531</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">389</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EBITDA</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,289</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,187</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">OPERATING INCOME BEFORE
RESTRUCTURING AND OTHER ITEMS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The term operating income before
restructuring and other items does not have any
standardized meaning according to Canadian GAAP.
It is therefore unlikely to be comparable to
similar measures presented by other companies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We use operating income before restructuring and
other items, among other measures, to assess the
operating performance of our ongoing businesses
without the effects of restructuring and other
items. 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 restructuring
and other items does not imply they are
necessarily non-recurring.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The most comparable Canadian GAAP financial
measure is operating income. The following tables
are reconciliations of operating income to
operating income before restructuring and other
items on a consolidated basis for BCE and Bell
Canada.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">BCE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>355</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income before
restructuring and other items</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,687</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,814</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">BELL CANADA</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,353</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,755</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income before
restructuring and other items</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,685</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,809</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">NET EARNINGS BEFORE RESTRUCTURING AND
OTHER ITEMS, NET GAINS ON INVESTMENTS, AND
COSTS INCURRED TO FORM BELL ALIANT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The term net earnings 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We use net earnings 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
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The most comparable Canadian GAAP financial
measure is net earnings applicable to common
shares. The following table is a reconciliation
of net earnings applicable to common shares to
net earnings before restructuring and other
items, net gains on investments and costs
incurred to form Bell Aliant on a consolidated
basis and per BCE Inc. common share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">60&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Management&#146;s Discussion and Analysis
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">2005</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">TOTAL</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">PER SHARE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">TOTAL</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">PER SHARE</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings applicable to common shares</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,937</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.04</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>222</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.26</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.04</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net gains on investments <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>(525</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>(0.61</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(27</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other costs incurred to form Bell Aliant <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>42</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.05</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings before restructuring and other items,
net gains on investments, and costs incurred to form Bell Aliant</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,676</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1.95</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.05</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><I>(1)</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Includes transaction costs associated with the formation of Bell Aliant. These costs relate
mainly to investment banking, professional and consulting fees. In 2006, we incurred $138&nbsp;million
($77&nbsp;million after tax and non-controlling interest).</I></TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><I>(2)</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Amounts for 2006 include the recognition of a future tax asset of $434&nbsp;million, representing
the tax-effected amount of approximately $2,341&nbsp;million of previously unrecognized capital loss
carryforwards as realization of the loss carryforwards now is more likely than not due to the
anticipated gain on the sale of Telesat.</I></TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><I>(3)</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Includes premium costs incurred by Bell Aliant on early redemption of long-term debt as a
result of the formation of Bell Aliant. In 2006, we incurred $122&nbsp;million ($42&nbsp;million after tax
and non-controlling interest).</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">FREE CASH FLOW
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 reinvest
in our company. We present free cash flow
consistently from period to period, which allows
us to compare our financial performance on a
consistent basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that certain investors and
analysts use free cash flow to value a business
and its underlying assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The most comparable Canadian GAAP financial
measure is cash from operating activities. The
following table is a reconciliation of cash from
operating activities to free cash flow on a
consolidated basis.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash from operating activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,389</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,337</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,133</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,357</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total dividends paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,546</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,450</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Free cash flow</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>708</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">569</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 61
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Reports on Internal Control
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">MANAGEMENT&#146;S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management of BCE Inc. (BCE)&nbsp;is responsible
for establishing and maintaining adequate
internal control over financial reporting under
the supervision of the President and Chief
Executive Officer and the Chief Financial
Officer. Internal control over financial
reporting is a process designed to provide
reasonable assurance regarding the reliability of
financial reporting and the preparation of
financial statements for external purposes in
accordance with generally accepted accounting
principles.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to its inherent limitations, internal
control over financial reporting may not prevent
or detect misstatements on a timely basis. Also,
projections of any evaluation of the
effectiveness of internal control over financial
reporting are subject to the risk that the
controls may become inadequate because of changes
in conditions or that the degree of
compliance with the policies or procedures may
deteriorate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management evaluated the design and
operation of BCE&#146;s internal control over
financial reporting as of December&nbsp;31, 2006,
based on the framework and criteria established
in <I>Internal Control &#150; Integrated Framework </I>issued
by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO), and has concluded
that such internal control over financial
reporting is effective. There are no material
weaknesses that have been identified by
management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management&#146;s assessment of the effectiveness
of BCE&#146;s internal control over financial
reporting as of December 31, 2006 has been
audited by Deloitte &#038; Touche LLP, Independent
registered chartered accountants, who also
audited BCE&#146;s consolidated financial statements
for the year ended December&nbsp;31, 2006. Deloitte &#038;
Touche issued an unqualified opinion on
management&#146;s assessment of BCE&#146;s internal control
over financial reporting and an unqualified
opinion on the effectiveness of BCE&#146;s internal
control over financial reporting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="m35148orm3514831.gif" alt="-s- Michael J. Sabia">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Michael J. Sabia<BR>
<I>President and Chief Executive Officer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="m35148orm3514832.gif" alt="-s- Siim A. Vanaselja">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Siim A. Vanaselja<BR>
<I>Chief Financial Officer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="m35148orm3514833.gif" alt="-s- Karyn A. Brooks">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Karyn A. Brooks<BR>
<I>Senior Vice-President and Controller</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">March&nbsp;7, 2007

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">62&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Reports on Internal Control
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">REPORT OF INDEPENDENT REGISTERED
CHARTERED ACCOUNTANTS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors and Shareholders of BCE Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have audited management&#146;s assessment,
included in the accompanying Management&#146;s Report
on Internal Control over Financial Reporting,
that BCE Inc. and subsidiaries (the &#147;Company&#148;)
maintained effective internal control over
financial reporting as of December&nbsp;31, 2006,
based on criteria established in <I>Internal Control
&#150; Integrated Framework </I>issued by the Committee of
Sponsoring Organizations of the Treadway
Commission. The Company&#146;s management is
responsible for maintaining effective internal
control over financial reporting and for its
assessment of the
effectiveness of internal control over
financial reporting. Our responsibility is to
express an opinion on management&#146;s assessment and
an opinion on the effectiveness of the Company&#146;s
internal control over financial reporting based
on our audit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We conducted our audit in accordance with
the standards of the Public Company Accounting
Oversight Board (United States). Those standards
require that we plan and perform the audit to
obtain reasonable assurance about whether
effective internal control over financial
reporting was maintained in all material
respects. Our audit included obtaining an
understanding of internal control over financial
reporting, evaluating management&#146;s assessment,
testing and evaluating the design and operating
effectiveness of internal control, and performing
such other procedures as we considered necessary
in the circumstances. We believe that our audit
provides a reasonable basis for our opinions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A company&#146;s internal control over financial
reporting is a process designed by, or under the
supervision of, the company&#146;s principal executive
and principal financial officers, or persons
performing similar functions, and effected by the
company&#146;s board of directors, management, and
other personnel to provide reasonable assurance
regarding the reliability of financial reporting
and the preparation of financial statements for
external purposes in accordance with generally
accepted accounting principles. A company&#146;s
internal control over financial reporting
includes those policies and procedures that (1)
pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets
of the company; (2)&nbsp;provide reasonable assurance
that transactions are recorded
as necessary to permit preparation of financial
statements in accordance with generally accepted
accounting principles, and that receipts and
expenditures of the company are being made only
in accordance with authorizations of management
and directors of the company; and (3)&nbsp;provide
reasonable assurance regarding prevention or
timely detection of unauthorized acquisition,
use, or disposition of the company&#146;s assets that
could have a material effect on the financial
statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of the inherent limitations of
internal control over financial reporting,
including the possibility of collusion or
improper management override of controls,
material misstatements due to error or fraud may
not be prevented or detected on a timely basis.
Also, projections of any evaluation of the
effectiveness of the internal control over
financial reporting to future periods are subject
to the risk that the controls may become
inadequate because of changes in conditions, or
that the degree of compliance with the policies
or procedures may deteriorate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our opinion, management&#146;s assessment that
the Company maintained effective internal control
over
financial reporting as of December&nbsp;31,
2006, is fairly stated, in all material respects,
based on the criteria established in
<I>Internal Control &#150; Integrated Framework </I>issued by
the Committee of Sponsoring Organizations of the
Treadway Commission. Also in our opinion, the
Company maintained, in all material respects,
effective internal control over financial
reporting as of December&nbsp;31, 2006, based on the
criteria established in <I>Internal Control &#150;
Integrated Framework </I>issued by the Committee of
Sponsoring Organizations of the Treadway
Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also audited, in accordance with
Canadian generally accepted auditing standards
and the standards of the Public Company
Accounting Oversight Board (United States), the
consolidated financial statements as of and for
the year ended December&nbsp;31, 2006 of the Company
and our report dated March&nbsp;7, 2007 expressed an
unqualified opinion on those financial
statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514834.gif" alt="(DELOITTE &#038; TOUCHE LLP)">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Deloitte &#038; Touche LLP<BR>
<I>Independent Registered Chartered Accountants</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Montr&#233;al, Canada<BR>
March&nbsp;7, 2007

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 63
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">MANAGEMENT&#146;S RESPONSIBILITY FOR FINANCIAL REPORTING

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These financial statements form the basis for
all of the financial information that appears in
this annual report.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements and all of the
information in this annual report are the
responsibility of the management of BCE Inc. and
have been reviewed and approved by the board of
directors. The board of directors is responsible
for ensuring that management fulfills its
financial reporting responsibilities. Deloitte &#038;
Touche LLP, Independent Registered Chartered
Accountants, have audited the financial
statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management has prepared the financial
statements according to generally accepted
accounting principles. Under these principles,
management has made certain estimates and
assumptions that are reflected in the financial
statements and notes. Management believes that
these financial statements fairly present BCE&#146;s
consolidated financial position, results of
operations and cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management has a system of internal controls
designed to provide reasonable assurance that the
financial statements are accurate and complete in
all material respects. This is supported by an
internal audit group that reports to the Audit
Committee, and includes communication with
employees about policies for ethical business
conduct. Management believes that the internal
controls provide reasonable assurance that our
financial records are reliable and form a proper
basis for preparing the financial statements, and
that our assets are properly accounted for and
safeguarded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The board of directors has appointed an
Audit Committee, which is made up of unrelated
and independent directors. The Audit Committee&#146;s
responsibilities include reviewing the financial
statements and other information in this annual
report, and recommending them to the board of
directors for approval. You will find a
description of the Audit Committee&#146;s other
responsibilities on page 108 of this annual
report. The internal auditors and the
shareholders&#146; auditors have free and independent
access to the Audit Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514831.gif" alt="-s- Michael J. Sabia"><BR>
Michael J. Sabia<BR>
<I>President and Chief Executive Officer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514832.gif" alt="-s- Siim A. Vanaselja"><BR>
Siim A. Vanaselja<BR>
<I>Chief Financial Officer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514833.gif" alt="-s- Karyn A. Brooks"><BR>
Karyn A. Brooks<BR>
<I>Senior Vice-President and Controller</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">March&nbsp;7, 2007

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">REPORT OF INDEPENDENT REGISTERED
CHARTERED ACCOUNTANTS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors and Shareholders of BCE Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have audited the accompanying consolidated
balance sheets of BCE Inc. and subsidiaries (the
&#147;Company&#148;) as of December&nbsp;31, 2006 and 2005, and
the related consolidated statements of operations,
deficit and cash flows for each of the three years
in the period ended December&nbsp;31, 2006. These
financial statements are the responsibility of the
Company&#146;s management. Our responsibility is to
express an opinion on these financial statements
based on our audits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to the financial statements for
the year ended December&nbsp;31, 2006, we conducted our
audit in accordance with Canadian generally
accepted auditing standards and the standards of
the Public Company Accounting Oversight Board
(United States). With respect to the financial
statements for the years ended December 31, 2005
and 2004, we conducted our audits in accordance
with Canadian generally accepted auditing
standards. Those standards require that we plan
and perform the audit to obtain reasonable
assurance about whether the financial statements
are free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well
as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our opinion, such consolidated financial
statements present fairly, in all material
respects, the financial position of BCE Inc. and
subsidiaries as of December&nbsp;31, 2006 and 2005,
and the results of their operations and their
cash flows for each of the three years in the
period ended December&nbsp;31, 2006 in conformity with
Canadian generally accepted accounting
principles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also audited, in accordance with the
standards of the Public Company Accounting
Oversight Board (United States), the
effectiveness of the Company&#146;s internal control
over financial reporting as of December 31,
2006, based on the criteria established in
<I>Internal Control &#151; Integrated Framework </I>issued
by the Committee of Sponsoring Organizations of
the Treadway Commission and our report dated
March&nbsp;7, 2007 expressed an unqualified opinion
on management&#146;s assessment of the effectiveness
of the Company&#146;s internal control over financial
reporting and an unqualified opinion on the
effectiveness of the Company&#146;s internal control
over financial reporting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="m35148orm3514834.gif" alt="(DELOITTE &#038; TOUCHE LLP)"><BR>
Deloitte &#038; Touche LLP<BR>
<I>Independent Registered Chartered Accountants</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Montr&#233;al, Canada<BR>
March&nbsp;7, 2007

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">64&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Consolidated Statements of Operations
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">FOR THE YEAR ENDED DECEMBER 31 <I>(in $ millions, except share amounts)</I></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,713</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,009</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(10,384</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10,371</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,895</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13, 14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,129</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,061</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net benefit plans cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(513</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(359</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(241</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(355</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(55</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,219</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(14,381</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13,846</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(14,355</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,332</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,654</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other (expense)&nbsp;income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(176</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">439</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(952</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(949</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(961</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pre-tax earnings from continuing operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,204</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,132</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(85</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(803</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(605</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(228</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(201</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(132</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Earnings from continuing operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,891</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,395</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings before extraordinary gain</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,524</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Extraordinary gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,593</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(70</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings applicable to common shares</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,937</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,523</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings per common share &#151; basic</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.12</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.13</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Extraordinary gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings per common share &#151; diluted</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.12</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.13</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Extraordinary gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2.25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Dividends per common share</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1.32</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average number of common shares outstanding &#151; basic (millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>861.4</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">924.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Consolidated Statements of Deficit
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">FOR THE YEAR ENDED DECEMBER 31 <I>(in $ millions)</I></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance at beginning of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(4,763</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,432</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,845</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,593</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends declared on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(70</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends declared on common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,132</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,222</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,110</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Excess of purchase price over stated capital of common shares
cancelled and related contributed surplus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(384</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance at end of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(4,343</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,763</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,432</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;65
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Consolidated Balance Sheets
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">AT DECEMBER 31 <I>(in $ millions)</I></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>581</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">349</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,868</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,525</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,233</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">915</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current assets of discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">894</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,684</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,683</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Capital assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22,079</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,772</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other long-term assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,816</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,306</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Indefinite-life intangible assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,902</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Goodwill</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,475</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,966</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Non-current assets of discontinued operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,856</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>36,957</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,482</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px DOUBLE #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,236</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,085</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>165</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">170</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>315</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">343</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Debt due within one year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>986</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,161</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current liabilities of discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">828</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,702</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,587</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Long-term debt</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>11,867</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,855</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other long-term liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,841</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,807</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Non-current liabilities of discontinued operation</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&nbsp;             </B>9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">614</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>21,410</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,863</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Non-controlling interest</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2, 21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,180</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,898</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Commitments and contingencies</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Shareholders&#146; Equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Preferred shares</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,670</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,670</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Common shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2, 23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,487</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,806</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Contributed surplus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2, 23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,555</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,081</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deficit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(4,343</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,763</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Currency translation adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(73</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total common shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>11,697</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,051</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,367</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,721</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total liabilities and shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>36,957</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,482</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">On behalf of the board of directors:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><IMG src="m35148orm3514835.gif" alt="-s- T. C. O&#146;Neill">
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top"><IMG src="m35148orm3514836.gif" alt="-s- V. L. Young"></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>Director</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Director</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">66&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Consolidated Statements of Cash Flows
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">FOR THE YEAR ENDED DECEMBER 31 <I>(in $ millions)</I></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows from operating activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,891</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,395</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustments to reconcile earnings from continuing operations
to cash flows from operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Amortization expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,129</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net benefit plans cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>513</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">241</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>355</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,219</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net losses (gains)&nbsp;on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>26</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(351</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Future income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(13</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(79</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>228</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">132</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Contributions to employee pension plans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(172</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(206</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(95</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other employee future benefit plan payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(96</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(93</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(81</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Payments of restructuring and other items</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(225</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(171</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(251</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Operating assets and liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(247</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(384</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows from operating activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,389</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,268</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows from investing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,133</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,357</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,272</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Business acquisitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(71</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(228</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,118</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Business dispositions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Aliant Regional Communications Income Fund (Bell Aliant)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(255</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase in investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(304</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(233</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(57</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Decrease in investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>64</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">711</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">183</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows used in investing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,701</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,762</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,551</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows from financing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Decrease) increase in notes payable and bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(57</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(69</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Issue of long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,392</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">461</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Repayment of long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(4,767</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,073</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,691</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Issue of common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>29</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Repurchase of common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,241</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Issue of equity securities by subsidiaries to non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">Redemption of equity securities by subsidiaries from non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(305</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(78</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(25</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash dividends paid on common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,169</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,195</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,108</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash dividends paid on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(84</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(86</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(85</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">Cash dividends/distributions paid by subsidiaries to non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(293</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(169</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(179</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(157</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(64</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(74</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows used in financing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,639</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,613</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,571</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash used in continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,951</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(854</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash provided by discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,087</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net increase (decrease)&nbsp;in cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>136</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(342</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents at beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>445</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">722</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash and cash equivalents at end of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>581</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">445</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">380</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consists of:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash and cash equivalents of continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>581</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">349</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">298</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash and cash equivalents of discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>581</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">445</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">380</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes paid (net of refunds)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>199</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>874</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">916</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><I>This section of our annual report contains
the audited consolidated financial statements of
BCE and detailed notes with explanations and
additional information.</I></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The financial statements contain our results
and financial history for the past three years.
The notes are an important part of understanding
our financial results. They explain how we
arrived at the numbers in the financial
statements, describe significant events or
changes that affect the numbers, and explain
certain items in the financial statements.</I> <I>The notes also include details about our results
that do not appear in the financial statements.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Except in the auditors&#146; report, </I>we<I>, </I>us<I>, </I>our
<I>and </I>BCE <I>mean BCE Inc., its subsidiaries and joint
ventures. References to Bell Aliant include
matters relating to, and actions taken by, both
Aliant Inc. (Aliant) prior to July&nbsp;7, 2006, and
Bell Aliant Regional Communications Income Fund
on and after such date.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>All amounts are in millions of Canadian
dollars, except where noted.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1: Significant Accounting Policies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BASIS OF PRESENTATION

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have prepared the consolidated financial
statements according to Canadian generally
accepted accounting principles (GAAP).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We consolidate the financial statements of
all of the companies we control. We
proportionately consolidate our share of the
financial statements of our joint venture
interests. All transactions and balances between
these companies have been eliminated on
consolidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">COMPARATIVE FIGURES
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have restated financial information for
previous periods to reflect the sales of our
investment in CGI Group Inc. (CGI)&nbsp;and most of
our investment in CTVglobemedia Inc.
(CTVglobemedia) (formerly known as Bell
Globemedia Inc.). CGI and CTVglobemedia are shown
as discontinued operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">USING ESTIMATES
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">When preparing financial statements according
to GAAP, management makes estimates and
assumptions relating to:</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reported amounts of revenues and expenses</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reported amounts of assets and liabilities</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>disclosure of contingent assets and liabilities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We base our estimates on a number of factors,
including historical experience, current events
and actions that the company may undertake in the
future, and other
assumptions that we believe are reasonable under
the circumstances. Actual results could differ
from those
estimates under different assumptions or
conditions. We use estimates when accounting for
certain items such as revenues, allowance for
doubtful accounts, useful lives of capital
assets, asset impairments, inventory reserves,
legal and tax contingencies, employee
compensation plans, employee benefit plans,
evaluation of minimum lease terms for operating
leases, income taxes and goodwill impairment. We
also use estimates when recording the fair values
of assets acquired and liabilities assumed in a
business combination.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RECOGNIZING REVENUE
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We recognize operating revenues when they are
earned, specifically when all the following
conditions are met:</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>services are
provided or products are delivered to customers</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>there is clear evidence that an arrangement exists</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>amounts are fixed or can be determined</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to collect is reasonably assured.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">In particular, we recognize:
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; fees for long distance and wireless
services when we provide the services</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; other fees, such as network access fees,
licence fees, hosting fees, maintenance fees and
standby fees, over the term of the contract</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; subscriber revenues when customers receive the service</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;
advertising revenues when advertisements are aired, or printed and distributed</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; revenues from the sale of equipment
when the equipment is delivered to customers and
accepted</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; revenues on long-term
contracts as services are provided, equipment is
delivered and accepted, or contract milestones
are met</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; rebates, allowances and
payments to customers as a reduction of revenue
when we do not receive an identifiable and
separate benefit.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">68&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We enter into sales that may include a number of
products and services, notably in our wireless
product line and in our
Business segment. In both cases, we separate each
product or service in these sales and account for
them separately according to the methods
described above when the following three
conditions are met:</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the product or
service has value to our customer on a
stand-alone basis</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; there is objective
and reliable evidence of the fair value of the
product or service</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; a general right of
return, delivery or performance of any
undelivered product or service is probable and
substantially in our control.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">If there is objective and reliable evidence of
fair value for all products and services in a
sale, the total price to the customer is
allocated to the separate products and services
based on their relative fair value. Otherwise, we
first allocate a portion of the total price to
any undelivered products and services based on
their fair value and the remainder to any
products and services that have been delivered.
If the conditions to separately account for the
product or service are not met, we generally
recognize revenue pro rata over the term of the
sale agreement.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may enter into arrangements with
subcontractors who provide services to our
customers. When we act as the principal in these
arrangements, we recognize revenue based on the
amounts billed to customers. Otherwise, we
recognize the net amount that we keep as revenue.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We accrue an estimated amount for sales
returns, based on our past experience, when
revenue is recognized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record payments we receive in advance,
including upfront non-refundable payments, as
deferred revenues until we provide the service or
deliver the product to customers. Deferred
revenues are presented in <I>Accounts payable and
accrued liabilities </I>or in <I>Other long-term
liabilities </I>on the balance sheet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CASH AND CASH EQUIVALENTS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We classify highly liquid investments with a
maturity of three months or less from the date of
purchase as <I>Cash and cash equivalents</I>. Highly
liquid investments with a maturity of more than
three months are classified as short-term
investments and reported in <I>Other current assets</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SECURITIZATION OF ACCOUNTS RECEIVABLE
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We consider a transfer of accounts receivable
to be a sale when we give up control of them in
exchange for proceeds from a trust (other than
our retained beneficial interest in the accounts
receivable).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We determine the fair value of the accounts
receivable transferred based on the present value
of future expected cash flows, which we project
using management&#146;s best estimates of discount
rates, the weighted average life of accounts
receivable, credit loss ratios and other key
assumptions. We recognize a loss on this kind of
transaction, which we record in <I>Other income</I>. The
loss is calculated by reference to the carrying
amount of the transferred accounts receivable and
is allocated between
accounts receivable sold and our retained
interest, according to their relative fair values
on the day the transfer is made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We continue to service the accounts
receivable after the transfer. As a result, we:
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; recognize a servicing liability on the
day accounts receivable are transferred to the
trust</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>
&nbsp;&nbsp; amortize this liability to
earnings over the expected life of the
transferred accounts receivable.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">INVENTORIES
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We value inventories at cost or market value,
whichever is lower, and determine market value
using replacement cost. We maintain inventory
valuation reserves for inventory that is slow
moving or becomes obsolete, using an inventory
aging analysis to calculate the amount of the
reserves.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CAPITAL ASSETS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We carry capital assets at cost, less
accumulated amortization. Most of our
telecommunications assets are amortized using the
group depreciation method. When we retire assets
in the ordinary course of business, we charge
their original cost to accumulated amortization.
In general, we amortize capital assets on a
straight-line basis over the estimated useful
lives of the assets. We review the estimates of
the useful lives of the assets every year and
adjust them on a prospective basis, if needed.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="71%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ESTIMATED USEFUL LIFE</TD>

</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Telecommunications assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">10 to 25 years</TD>

</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Machinery and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2 to 20 years</TD>

</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Buildings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">10 to 40 years</TD>

</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Satellites</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">10 to 15 years</TD>

</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Finite-life intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Software</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">3 to 7 years</TD>

</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Customer relationships</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">5 to 40 years</TD>

</TR>

<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We initially measure and record asset
retirement obligations at fair value using a
present value methodology, adjusted subsequently
for any changes to the timing or amount of the
original estimate of cash flows. We capitalize
asset retirement costs as part of the related
assets</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;69
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">and amortize these into earnings over time,
along with the increase in the recorded
obligation to reflect the passage of time.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We capitalize construction costs, labour and
overhead (including interest, when the project
cost is significant) related to assets we build
or develop.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We capitalize certain costs of developing or
buying software for internal use. We expense
software maintenance and training costs when they
are incurred. The expense is included in
<I>Operating expenses </I>in the statement of
operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We assess capital assets for impairment when
events or changes in circumstances indicate that
we may not be able to recover their carrying
value. We calculate impairment by deducting the
assets&#146; fair value, based on discounted cash
flows expected from their use and disposition,
from their carrying value. Any excess is deducted
from earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We account for leases that transfer
substantially all of the benefits and risks of
ownership of property to us as capital leases. We
record an asset at the time a capital lease is
entered into together with a related long-term
obligation. Rental payments under operating
leases are expensed as incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ACCOUNTING FOR INVESTMENTS
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We use the following methods to account for
investments that are not consolidated or
proportionately consolidated in our financial
statements:</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the equity method for our
investments in companies where we have a
significant influence over their operating,
investing and financing activities</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the
cost method for our investments in all other
companies.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We expense any decline in the fair value of our
investments below their carrying value when
management assesses the decline to be other than
temporary.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We include investments in <I>Other long-term
assets </I>on the balance sheet. Earnings from
investments and any declines in fair value are
included in <I>Other income </I>in the statement of
operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">COSTS OF ISSUING DEBT AND EQUITY
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The costs of issuing debt are deferred in
<I>Other long-term assets</I>. They are amortized on a
straight-line basis over the term of the related
debt and are included in <I>Interest expense </I>in the
statement of operations. The costs of issuing
equity are reflected in the statement of deficit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">INDEFINITE-LIFE INTANGIBLE ASSETS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our indefinite-life intangible assets consist
mainly of the Bell brand name and spectrum
licences. We assess these assets for impairment
in the fourth quarter of every year and when
events or changes in circumstances indicate that
an asset might be impaired.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We calculate impairment by deducting the
assets&#146; fair value, based on estimates of
discounted future cash flows or other valuation
methods, from their carrying value. Any excess is
deducted from earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">GOODWILL
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We assess goodwill impairment of individual
reporting units in the fourth quarter of every
year and when events or changes in circumstances
indicate that goodwill might be
impaired.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We assess goodwill impairment in two steps:
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>
&nbsp;&nbsp; we identify any potential impairment by
comparing the fair value of a reporting unit to
its carrying value. Fair value is based on
estimates of discounted future cash flows or
other valuation methods. When the fair value of
the reporting unit is less than its carrying
value, we allocate the fair value to all of its
identifiable assets and liabilities, based on
their fair values. The excess of the fair value
of the reporting unit over the total of the
amounts assigned to its assets and liabilities is
the fair value of goodwill.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; we determine if there is an impairment
by comparing the carrying value of goodwill to
its fair value. Any excess is deducted from
earnings.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">TRANSLATION OF FOREIGN CURRENCIES
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Self-Sustaining Foreign Operations
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For self-sustaining foreign operations, we use:
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; the exchange rates on the date of the
balance sheet for assets and liabilities</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>
&nbsp;&nbsp;
the average exchange rates during the year
for revenues and expenses.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">Translation exchange gains and losses are
reflected as a currency translation adjustment in
shareholders&#146; equity. When we reduce our net
investment in a self-sustaining foreign
operation, we recognize a portion of the currency
translation adjustment in earnings.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Integrated Foreign Operations
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For integrated foreign operations, we use:
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; the exchange rates on the date of the
balance sheet for monetary assets and
liabilities, such as cash, accounts receivable
and payable, and long-term debt</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">70&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; the historical exchange rates for
non-monetary assets and liabilities, such as
capital assets</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; the average exchange
rates during the year for revenues and expenses.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">Translation exchange gains and losses are
included in <I>Other income </I>in the statement of
operations.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Domestic Transactions and Balances in Foreign Currencies
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">For domestic transactions in foreign
currencies, we use:</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the exchange rates
on the date of the balance sheet for monetary
assets and liabilities</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the historical
exchange rates for non-monetary assets and
liabilities</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the average exchange rates
during the year for revenues and expenses.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">Translation exchange gains and losses are
included in <I>Other income </I>in the statement of
operations.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">DERIVATIVE FINANCIAL INSTRUMENTS
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We use various derivative financial
instruments to manage:</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>interest rate risk</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>foreign exchange rate risk</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the price of BCE Inc. common shares relating to special compensation payments (SCPs)
and deferred share units (DSUs).</TD>
</TR>

</TABLE>
</DIV>




<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We do not use derivative financial instruments
for speculative or trading purposes.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We document all relationships between
derivatives and the items they hedge, and our
risk management objective and strategy for using
various hedges. This process includes linking
every derivative to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a specific asset or liability, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a specific firm commitment, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an anticipated transaction.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We assess the effectiveness of derivatives in
managing risk initially when the hedge is put in
place, and on an ongoing basis. If a hedge
becomes ineffective, we stop using hedge
accounting.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We follow these policies when accounting for
derivatives:
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; unrealized gains or losses
relating to derivatives that qualify for hedge
accounting are recognized in earnings when the
hedged item is disposed of or when the
anticipated transaction is ended early</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; gains and losses related to hedges of
anticipated transactions are recognized in
earnings or are recorded as adjustments of
carrying values when the transaction takes place</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; derivatives that are economic hedges
but do not qualify for hedge accounting are
recognized at fair value. We record the change in
fair value in earnings.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; any premiums paid for derivatives used
in hedging relationships are deferred and
expensed to earnings over the term of the
contract</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; any forward premiums or
discounts on forward foreign exchange contracts
that are used to hedge long-term debt denominated
in foreign currencies are amortized as an
adjustment to interest expense over the term of
the forward contract.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The following describes our policies for specific
kinds of derivatives.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Interest Rate Swap Agreements
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We use interest rate swap agreements to help
manage the
fixed and floating interest rate mix of our debt
portfolio. These agreements often involve
exchanging interest payments without exchanging
the notional principal amount that the payments
are based on. We record the exchange of payments
as an adjustment of interest expense on the
hedged debt. We include the related amount
receivable or payable from counterparties in <I>Accounts receivable </I>or <I>Interest payable</I>.</DIV>




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Foreign Currency Swap Agreements
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We use foreign currency swap agreements to
manage the foreign exchange rate exposure of some
of our debt that is denominated in foreign
currencies. We designate these agreements as
hedges of firm commitments to pay interest and/or
principal in the foreign currency. We recognize
gains and losses on these contracts at the same
time we recognize the gains and losses on the
hedged item. Unrealized gains and losses are
included in <I>Other long-term assets </I>or <I>Other
long-term liabilities</I>.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Foreign Currency Forward Contracts and
Options
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We use foreign exchange forward
contracts and options to manage:</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;
interest and principal denominated in foreign
currencies. We designate these agreements as
hedges of firm commitments to pay the principal
in the foreign currency.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the exposure
to anticipated transactions denominated in
foreign currencies. We designate these agreements
as hedges of future cash flows.</DIV>


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</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Equity Forward Contracts
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We use forward contracts to manage changes in
the price of BCE Inc. common shares relating to
SCPs and DSUs.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recognize gains and losses on these
contracts the same way we recognize the gains and
losses on the hedged item. Unrealized gains and
losses are included in
<I>Other long-term assets </I>or <I>Other long-term liabilities</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">EMPLOYEE BENEFIT PLANS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Defined Benefit Plans

</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We maintain defined benefit (DB)&nbsp;plans that
provide pension benefits for most of our
employees. Benefits are based on the employee&#146;s
length of service and average rate of pay during
the best consecutive five years of service. Most
employees are not required to contribute to the
plans. The plans provide increasing pension
benefits to help protect a portion of the income
of retired employees against inflation.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are responsible for adequately funding
our DB pension plans. We make contributions to
them based on various actuarial cost methods that
are permitted by pension regulatory bodies.
Contributions reflect actuarial assumptions about
future investment returns, salary projections and
future service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also provide other post-employment
benefits to some of our employees, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>health-care and life insurance benefits during retirement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other benefits, including various disability plans, workers&#146; compensation and medical benefits to
former or inactive employees, their beneficiaries
and dependants, from the time their employment
ends until their retirement starts, under certain
circumstances.</TD>
</TR>

</TABLE>
</DIV>




<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We do not fund most of these other
post-employment benefit plans.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We accrue our obligations and related costs
under employee benefit plans, net of the fair
value of plan assets. Pension and other
retirement benefit costs are determined using:</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the projected benefit method, prorated
on years of service, which takes into account
future pay levels</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; a discount rate based
on market interest rates of high-quality
corporate bonds with maturities that match the
timing and benefits expected to be paid by the
plans</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; management&#146;s best estimate of the
plans&#146; expected investment performance, pay
increases, retirement ages of employees and
expected health-care costs.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We value pension plan assets at fair value, which
is determined using current market values. We use
a market-related value to calculate the expected
return on plan assets. This value is based on a
four-year weighted average of the fair value of
the pension plan assets.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We amortize past service costs from plan
amendments on a straight-line basis over the
average remaining service period of employees who
were active on the day of the amendment. This
represents the period during which we expect to
realize economic benefits from the amendments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transitional assets and obligations that
arose upon implementation of new accounting
standards for employee future benefits are
amortized on a straight-line basis over the
average remaining service period of employees
expected to receive benefits under the plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We use the corridor approach to recognize
actuarial gains and losses into earnings. First
we deduct 10% of the benefit obligation or the
market-related value of plan assets, whichever is
greater, from the unamortized net actuarial gains
or losses based on a market-related value basis.
Then we amortize any excess over the average
remaining service period of active employees. At
the end of 2006, this period ranged from
approximately 9 to 13&nbsp;years, with a weighted
average period of 11&nbsp;years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December&nbsp;31 is the measurement date for our
employee benefit plans. Our actuaries perform a
valuation at least every three years to determine
the actuarial present value of the accrued
pension and other retirement benefits. An
actuarial valuation was last performed on most of
our pension plans on December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the restructuring of a benefit plan
results in both a curtailment and a settlement of
obligations, we account for the curtailment
before we account for the settlement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Defined Contribution Plans
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We also maintain defined contribution (DC)
plans that provide certain employees with pension
benefits. Under these plans, we are responsible
for contributing a predetermined amount to an
employee&#146;s retirement savings, based on a
percentage of that employee&#146;s salary.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recognize a pension cost for DC plans
when the employee provides service to the
company, essentially coinciding with our cash
contributions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Starting in 2005, new employees of BCE Inc.
and Bell Canada can participate only in the DC
pension arrangements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">INCOME TAXES
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">Current income tax expense is the estimated
income taxes payable for the current year after
any refunds or the use of losses incurred in
previous years.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">72 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We use the liability method to account
for future income taxes. Future income taxes
reflect:
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; the temporary differences
between the carrying amounts of assets and
liabilities for accounting purposes and the
amounts used for tax purposes</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; the
benefit of unutilized tax losses that will more
likely than not be realized and carried forward
to future years to reduce income taxes.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We calculate future income taxes using the rates
enacted by tax law and those substantively
enacted. The effect of a change in tax rates on
future income tax assets and liabilities is
included in earnings in the period when the
change is substantively enacted.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SUBSCRIBER ACQUISITION COSTS
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We expense all subscriber acquisition costs
when related services are activated.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">STOCK-BASED COMPENSATION PLANS
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s stock-based compensation plans
include the employee savings plans (ESPs), stock
options plans, restricted share units plans
(RSUs) and DSUs. Before 2000,
the long-term incentive plans often included
SCPs.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Starting in 2004, we made a number of
prospective changes to the key features of our
stock-based compensation plans, including:
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>
&nbsp;&nbsp;
the benefits awarded under long-term stock
option incentive plans were reduced as a result
of the introduction of a mid-term incentive plan
that uses RSUs</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; achieving a specific
performance target that must be met in order for
stock options to vest.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We credit contributed surplus for the amount of
stock option expense recorded over the vesting
period. Upon the exercise of stock options, we
credit share capital for the amount paid by the
employees as well as the amounts previously
credited to contributed surplus for services
rendered that were charged to compensation cost.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recognize the contributions BCE Inc.
makes under ESPs as compensation expense. We also
recognize compensation expense or recovery
relating to SCPs. The corresponding liabilities
are recorded as part of <I>Accounts payable and
accrued liabilities</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Stock Options
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We use the fair value-based method to account
for employee stock options granted on or after
January&nbsp;1, 2002 and the Black-Scholes option
pricing model to measure compensation expense
relating to options. For options that contain a
specific performance-based target, this is
reflected in the calculation of the weighted
average fair value per option granted.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Restricted Share Units
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">For each RSU granted we record compensation
expense that equals the market value of a BCE
Inc. common share at the date of grant, prorated
over the vesting period. Compensation expense is
adjusted for subsequent changes in the market
value of BCE Inc. common shares and management&#146;s
assessment of the number of RSUs that will vest.
The cumulative effect of the change in value is
recognized in the period of the change. Vested
RSUs are settled in BCE Inc. common shares
purchased on the open market or in cash, as the
holder chooses.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Deferred Share Units
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">For each DSU granted we record compensation
expense that equals the market value of a BCE
Inc. common share at the grant date. Compensation
expense is adjusted for subsequent changes in the
market value of BCE Inc. common shares. DSUs are
settled in BCE Inc. common shares purchased on
the open market following the cessation of a
participant&#146;s employment or when a director
leaves the board.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">REGULATION OF THE TELECOMMUNICATIONS INDUSTRY
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">Our business is affected by Canadian
Radio-Television and Telecommunications
Commission (CRTC)&nbsp;decisions over the prices we
charge for specific services, primarily local
telephone services and other operating
requirements. The CRTC ensures that Canadians
have access to reliable telephone and other
services at affordable prices. Some of our
subsidiaries, such as Bell Canada and Bell
Aliant, are regulated by the CRTC pursuant to the
<I>Telecommunications Act</I>.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RECENT CHANGES TO ACCOUNTING POLICIES AND STANDARDS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Non-Monetary Transactions

</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The CICA has reissued section 3830 of the
CICA Handbook as section 3831, <I>Non-Monetary
Transactions</I>, which establishes standards for the
measurement and disclosure of non-monetary
transactions. It also includes criteria for
defining &#145;commercial substance&#146; that replace the
criteria for defining &#145;culmination of the
earnings process&#146; in the former section. Adopting
this section did not have a material effect on
our consolidated financial statements.</DIV>


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</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">FUTURE CHANGES TO ACCOUNTING STANDARDS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Accounting Changes

</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The CICA issued section 1506 of the CICA
Handbook, <I>Accounting Changes</I>, which describes the
criteria for changing accounting policies, along
with the accounting and disclosure for changes in
accounting policies, changes in accounting
estimates and corrections of errors. These
changes came into effect as of January&nbsp;1, 2007.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Comprehensive Income
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The CICA issued section 1530 of the CICA
Handbook, <I>Comprehensive Income</I>, which describes
how to report and disclose comprehensive income
and its components. Comprehensive income is the
change in our net assets that results from
transactions, events and circumstances from
sources other than shareholders. It includes
items that would not normally be included in net
earnings, such as:</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; changes in the
currency translation adjustment relating to
self-sustaining foreign operations</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;
unrealized gains or losses on
available-for-sale investments</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; gains
and losses on cash flow hedges.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The CICA also made related changes to section
3250 of the CICA Handbook, <I>Surplus </I>(reissued as
section 3251, <I>Equity</I>) and section 1650 of the
CICA Handbook, <I>Foreign
Currency Translation </I>(reissued as section 1651,
<I>Foreign Currency Translation</I>).</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;1, 2007, we report
accumulated other comprehensive income and its
components in the consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effect of adopting this section on
January&nbsp;1, 2007 was not significant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Financial Instruments
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The CICA issued section 3855 of the CICA Handbook,
<I>Financial Instruments &#151; Recognition and Measurement</I>, which
describes the standards for recognizing and
measuring financial assets, financial liabilities
and derivatives. This section requires that: .</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; all financial assets be measured at
fair value, with some exceptions for loans and
investments that are classified as
held-to-maturity</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; all financial liabilities be measured
at fair value if they are derivatives or
classified as held for trading purposes. Other
financial liabilities are measured at their
amortized cost.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; all derivative financial instruments be
measured at fair value, even when they are part
of a hedging relationship.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The CICA has also reissued section 3860 of the
CICA Handbook as section 3861, <I>Financial
Instruments &#151; Disclosure and Presentation</I>, which
establishes standards for presentation of
financial instruments and non-financial
derivatives, and identifies the information that
should be disclosed about them.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effect of adopting this section on
January&nbsp;1, 2007 was not significant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Hedges
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The CICA issued section 3865 of the CICA
Handbook, <I>Hedges</I>, which describes how and when
hedge accounting can be used.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hedging is an activity used to change an
exposure to one or more risks by creating an
offset between:
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; changes in the fair value of a
hedged item and a hedging item, or</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; changes in the cash flows
attributable to a hedged item and a hedging item,
or</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; changes resulting from a risk
exposure related to a hedged item and a hedging
item.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">Under hedge accounting, all gains, losses,
revenues and expenses from the derivative and the
item it
hedges are recorded in the statement of
operations in the same period.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effect of adopting this section on
January&nbsp;1, 2007 was not significant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 2: Bell Aliant</B>
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">On March&nbsp;7, 2006, BCE Inc. and Aliant
announced their intention to form a new regional
telecommunications service provider in the form
of an income trust. On July&nbsp;7, 2006, the Plan of
Arrangement forming Bell Aliant was completed.
Bell Aliant combines Bell Canada&#146;s former
regional wireline operations in rural Ontario and
Qu&#233;bec with Aliant&#146;s former wireline operations
and includes Bell Canada&#146;s former 63.4% interest
in NorthernTel Limited Partnership (NorthernTel)
and T&#233;l&#233;bec Limited Partnership (T&#233;l&#233;bec), the
operating partnerships of the Bell Nordiq Income
Fund, held through Bell Nordiq Group Inc. (Bell
Nordiq). Upon closing of the transaction, BCE
held a 73.5% indirect interest in Bell Aliant.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE&#146;s ownership of Bell Aliant has been
reduced to 44.7% through a distribution of trust
units by way of a return of capital to holders of
BCE Inc. common shares
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">74 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">on July&nbsp;10, 2006, in accordance with the Plan of
Arrangement. This distribution had the following
impact on our balance sheet:</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Goodwill decreased by $533&nbsp;million</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Non-controlling interest increased by $469&nbsp;million</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Common shares decreased by $2,549&nbsp;million and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Contributed surplus increased by $1,547&nbsp;million.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We continue to consolidate Bell Aliant as we have
the right to elect the majority of the board of
directors. The transaction increased the
non-controlling interest in our investment.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Costs incurred to form Bell Aliant in 2006
are comprised mainly of:
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B> &nbsp;&nbsp; transaction
costs of $138&nbsp;million related mainly to
investment banking, professional and consulting
fees. See Note 5, <I>Restructuring and Other Items</I>.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; premium cost on early redemption of
Bell Aliant long-term debt of $122&nbsp;million. See
Note 6, <I>Other (Expense) Income</I>.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp; Of these transaction costs, $255
million have been paid in cash in 2006.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">On June&nbsp;30, 2006, Bell Aliant redeemed all of its
issued and outstanding Cumulative Redeemable
Preferred Shares, Series&nbsp;2 for a total amount of
$175&nbsp;million.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;7, 2006, Bell Aliant renegotiated
its existing long-term credit facilities
outstanding as of December&nbsp;31, 2005 and new ones
were established to
accommodate the financing requirements of the
Plan of Arrangement forming Bell Aliant,
refinance existing long-term debt and for general
working capital purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;25, 2006, Bell Aliant issued an
aggregate of $1.25&nbsp;billion of principal amount of
unsecured medium term notes (the &#145;Notes&#146;) in two
tranches: $750&nbsp;million of 5-year Notes to mature
September&nbsp;26, 2011; and $500&nbsp;million of 10-year
Notes to mature September&nbsp;26, 2016. The Notes
were issued at a discount for yields to maturity
of 4.72% and 5.41%, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BELL NORDIQ
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">On July&nbsp;1, 2006, Bell Nordiq redeemed all of
its issued and outstanding First Preferred
Shares, Series&nbsp;8 for a total amount of $60
million.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;16, 2007, Bell Nordiq Income Fund
unit holders approved the privatization of Bell
Nordiq Income Fund, previously announced on
October&nbsp;11, 2006. On January&nbsp;29, 2007, the Bell
Nordiq Income Fund unit holders received a
special distribution of $4.00 in cash per unit
and on January&nbsp;30, 2007, received 0.4113 of a
Bell Aliant unit for each Bell Nordiq Income Fund
unit held. The Bell Nordiq Income Fund units
ceased trading on The Toronto Stock Exchange
(TSX)&nbsp;as of the close of business on January&nbsp;29,
2007 and were delisted effective January&nbsp;30,
2007. At December&nbsp;31, 2006, Bell Aliant held a
63.3% voting interest in Bell Nordiq Income Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3: Segmented Information</B>
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The accounting policies used by the segments
are the same as those we describe in Note 1,
<I>Significant Accounting Policies</I>. Segments
negotiate sales with each other as if they were
unrelated parties.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We measure the profitability of each segment
based on its operating income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operations, including most of our
revenues, capital assets and goodwill, are
located in Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We report our results of operations under
five segments: <I>Residential</I>, <I>Business</I>, <I>Bell
Aliant</I>, <I>Other Bell Canada </I>and <I>Other BCE</I>. Our
segments reflect how we manage our business and
how we classify our operations for planning and
measuring performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Starting in the third quarter of 2006, our
segment reporting reflects the formation of Bell
Aliant and it is reported as a separate segment.
Since Bell Aliant includes the operations of Bell
Canada&#146;s former regional wireline operations and
Bell Nordiq, the results of our other segments
have been restated to reflect the sale of these
operations. Additionally, the results of our
other segments
have been restated to reflect the sale of
the operations to Bell Canada of Aliant wireless and
the DownEast Mobility Limited (DownEast) retail
stores, which are now reported in our Residential
and Business segments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Residential segment provides local
telephone, long distance, wireless, Internet
access, video and other services to Bell Canada&#146;s
residential customers, mainly in urban Ontario
and Qu&#233;bec. Wireless services are also offered in
Western Canada and video services are provided
nationwide.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Business segment provides local
telephone, long distance, wireless, data
(including Internet access) and other services to
Bell Canada&#146;s small and medium-sized businesses
and large enterprise customers in urban Ontario
and Qu&#233;bec, as well as business customers in
Western Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bell Aliant segment provides local
telephone, long distance, data and other
information technology and communication services
to residential and business customers in the
Atlantic provinces, and in rural Ontario and
Qu&#233;bec.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Other Bell Canada segment includes
Bell Canada&#146;s Wholesale business and the
financial results of Northwestel Inc.
(Northwestel). Our Wholesale business provides
local telephone, long distance, wireless, data
and other services to competitors who resell
these services. Northwestel provides
telecommunications services to less populated
areas of Canada&#146;s northern territories. At
December&nbsp;31, 2006, Bell Canada owned 100% of
Northwestel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Other BCE segment includes the financial
results of our satellite businesses as well as
the costs incurred by our corporate office. This
segment includes Telesat Canada (Telesat).
Telesat provides satellite communications and
systems management and is a consultant in
establishing, operating and upgrading satellite
systems worldwide. BCE Inc. owns 100% of Telesat.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In classifying our operations for planning
and measuring performance, all restructuring and
other items at Bell Canada and its subsidiaries
except for Bell Aliant are included in the Other
Bell Canada segment and not allocated to the
Residential or Business segments because they are
managed centrally.
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The following tables are a summary of financial information by segment for the last two years.
Segmented information for the year ended December&nbsp;31, 2004 has not been restated to reflect our new
segments as it is not practicable to prepare.</DIV>

<DIV align="center">
<TABLE style="font-size: 6pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
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    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">INTER-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">SEGMENT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">INTER-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
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    <TD nowrap align="right" colspan="2">ELIMINA-</TD>
    <TD>&nbsp;</TD>
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    <TD nowrap align="right" colspan="2">SEGMENT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
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    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OTHER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TIONS</TD>
    <TD>&nbsp;</TD>
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    <TD nowrap align="right" colspan="2">ELIMINA-</TD>
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    <TD nowrap align="right" colspan="2">&nbsp;</TD>
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</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&#150; BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OTHER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TIONS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CONSOLI-</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RESIDENTIAL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BUSINESS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ALIANT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CANADA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CANADA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CANADA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BCE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&#150; OTHER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">DATED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>For the year ended
December&nbsp;31, 2006</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">External customers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,086</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,900</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,996</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,358</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,340</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>373</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,713</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Inter-segment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>157</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>362</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>234</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(758</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>162</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(170</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total operating revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,099</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,057</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,358</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,592</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(758</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,348</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>535</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(170</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,713</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,649</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>811</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>777</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,353</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(21</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,332</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other (expense)&nbsp;income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(176</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(952</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(85</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(228</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing
operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,891</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Segment assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,787</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,632</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,974</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,772</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>35,165</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,792</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>36,957</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments at equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,299</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(767</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(517</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(338</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,921</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(212</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,133</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>For the year ended December&nbsp;31, 2005</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">External customers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,814</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Inter-segment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(719</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(167</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total operating revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,966</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,651</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(719</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(167</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">863</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other (expense)&nbsp;income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(949</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(803</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(201</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing
operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,834</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Segment assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,409</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,687</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,482</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments at equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,417</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(867</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(525</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(310</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,119</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(238</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,357</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">76 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The following table is a summary of financial information by product for the last three years.</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Local and access</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,212</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,572</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long distance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,798</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,055</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,327</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wireless</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,491</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,818</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Data</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,120</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,640</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Video</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,150</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">976</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Terminal sales and other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,577</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,580</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,348</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,787</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other BCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>535</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">422</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Inter-segment eliminations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(170</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(167</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(200</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total BCE</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,713</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,009</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 4: Business Acquisitions and Dispositions</B>
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The consolidated statements of operations
include the results of acquired businesses from
the date they were purchased.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BUSINESS ACQUISITIONS
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">We made various business acquisitions in 2006
for a total consideration of $82&nbsp;million.</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TOTAL</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Consideration received:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-cash working capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Indefinite-life intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>19</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>49</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(4</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>73</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net assets acquired</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>82</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Consideration given: </B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>76</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Acquisition costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>82</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<TABLE align="center" cellspacing="0" cellpadding="0" border="0" width="100%">
<TR style="font-size: 6pt">
<TD width="1%">&nbsp;</TD>
<TD width="99%">&nbsp;</TD>
</TR>

 <TR style="font-size: 10pt">
  <TD valign="top"><I>(1)</I></TD>
  <TD><I>Excluding contingent payments of $5
million that may be paid if certain conditions
specified in the purchase agreements are met. If
the payments are made, the amounts will be
allocated to goodwill.</I></TD>
 </TR>
</TABLE>




<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">Of the $49&nbsp;million goodwill acquired in 2006:</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$29&nbsp;million relates to the Business
segment, $7&nbsp;million relates to the Residential
segment, $12&nbsp;million relates to the Bell Aliant
segment and $1&nbsp;million relates to the Other BCE
segment</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$5&nbsp;million is deductible for
tax purposes.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">The purchase price allocation for all 2006
acquisitions includes certain estimates. The
final purchase price allocation for each business
acquisition will be completed within 12&nbsp;months of
the acquisition date.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We made a number of business acquisitions in
2005, including:
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>NR Communications Ltd. (NR
Communications) </I>&#151; In February and November&nbsp;2005,
Bell Canada acquired 100% of the outstanding
shares of NR Communications, which holds a 50%
ownership in Inukshuk, a joint venture entered
into with Rogers Communications Inc. to provide
wireless broadband services.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>Nexxlink Technologies Inc. (Nexxlink)</I>
&#151; In February&nbsp;2005, Bell Canada acquired 100% of
the outstanding shares of Nexxlink, a provider of
integrated IT solutions.</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;77
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ALL OTHER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NR</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NEXXLINK</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BUSINESS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">COMMUNI-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TECHNOL-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ACQUI-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CATIONS LTD.</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OGIES INC.</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">SITIONS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TOTAL</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Consideration received:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-cash working capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(19</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">128</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Indefinite-life intangible assets <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(61</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(61</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term liabilities <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">241</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents (bank indebtedness)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 6pt"><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net assets acquired</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 6pt"><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Consideration given: </B><SUP style="font-size: 85%; vertical-align: text-top"><B>(2)</B></SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">241</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Acquisition costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<TABLE align="center" cellspacing="0" cellpadding="0" border="0" width="100%">
 <TR style="font-size: 6pt">
  <TD width="1%">&nbsp;</TD>
  <TD width="99%">&nbsp;</TD>
 </TR>
 <TR style="font-size: 10pt">
  <TD valign="top"><I>(1)</I></TD>
  <TD><I>In 2006, we decreased goodwill by $12&nbsp;million and increased indefinite-life intangible assets
by $15&nbsp;million and future income tax liabilities by $3&nbsp;million upon finalizing the purchase price
allocation of 2005 business acquisitions. These adjustments have been reflected in the above table.
See Note 16, </I>Goodwill<I>.</I></TD>
 </TR>
 <TR style="font-size: 3pt">
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
 </TR>

<TR style="font-size: 10pt">
  <TD valign="top"><I>(2)</I></TD>
  <TD><I>Excluding contingent payments of $8&nbsp;million that may be paid if certain
conditions specified in the purchase agreements are met. If the payments are made, the amounts will
be allocated to goodwill.</I></TD>
 </TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Of the $119&nbsp;million goodwill acquired in 2005:
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$78&nbsp;million related to the Business
segment, $23&nbsp;million related to the Residential
segment, $11&nbsp;million related to the Other Bell
Canada segment and $7&nbsp;million related to the
Other BCE segment</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$31&nbsp;million is
deductible for tax purposes.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">We made the following business acquisitions in 2004:
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>Canadian operations of 360networks
Corporation (360networks) </I>&#151; In November&nbsp;2004,
Bell Canada acquired the Canadian operations of
360networks, a telecommunications service
provider. The purchase included the shares of
360networks&#146; subsidiary GT Group Telecom Services
Corporation and certain interconnected U.S.
network assets. Following the purchase, Bell
Canada sold the retail customer operations in
Central and Eastern Canada to Call-Net
Enterprises Inc. (Call-Net). For a share of the
revenues, Bell Canada now provides network
facilities and other operations and support
services to Call-Net so it can service its
customer base. The fair value of the net assets
acquired exceeded the purchase price. For
accounting purposes, the excess was eliminated
by:</DIV>


<DIV align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&#151; reducing the amounts assigned to the
acquired non-monetary assets to nil</DIV>


<DIV align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&#151; recognizing the balance of $69&nbsp;million
as an extraordinary gain in our consolidated
statement of operations.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>DownEast </I>&#151; In October&nbsp;2004, Aliant
acquired 100% of the outstanding shares of
DownEast, a communication solutions retailer.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>Bell West </I>&#151; In August&nbsp;2004, Bell
Canada acquired Manitoba Telecom Services Inc.&#146;s
(MTS)&nbsp;40% interest in Bell West. Bell Canada now
owns 100% of Bell West.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>Infostream Technologies Inc.
(Infostream) </I>&#151; In May&nbsp;2004,
Bell Canada acquired 100% of the outstanding
shares of Infostream. Infostream is a systems and
storage technology firm that provides networking
solutions for voice over Internet protocol
(VoIP), storage area networks and network
management.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>Charon Systems Inc. (Charon) </I>&#151; In May
2004, Bell Canada acquired 100% of the assets of
Charon. Charon is a full-service IT solutions
provider that specializes in server-based
computing, systems integration, IT security,
software development and IT consulting.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>Elix Inc. (Elix) </I>&#151; In March&nbsp;2004, Bell
Canada acquired 75.8% of the outstanding shares
of Elix. Elix offers technology consulting,
integration and implementation of call routing
and management systems, IT application
integration, and design and implementation of
electronic voice-driven response systems.</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;<I>Accutel Conferencing Systems Inc.
(Canada) </I>and <I>Accutel Conferencing Systems Corp.
(U.S.) (collectively Accutel) </I>&#151; In February
2004, Bell Canada acquired 100% of the
outstanding shares of Accutel, which provides
teleconferencing services.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">78 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CANADIAN</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">40%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ALL OTHER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OPERATIONS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">INTEREST</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BUSINESS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">IN BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ACQUI-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">360NETWORKS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">WEST</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">SITIONS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TOTAL</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Consideration received:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-cash working capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">166</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">561</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(58</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(58</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,206</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Bank indebtedness</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net assets acquired</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,202</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Extraordinary gain</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Consideration given:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,102</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Acquisition costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Future cash payment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Issuance of 582,081 Aliant common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,133</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">Of the $561&nbsp;million goodwill acquired in 2004:</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$451&nbsp;million related to the Business
segment, $4&nbsp;million related to the Residential
segment, $31&nbsp;million related to the Aliant
segment, and $75&nbsp;million related to the Other
Bell Canada segment</DIV>


<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$18&nbsp;million is
deductible for tax purposes.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BUSINESS DISPOSITION
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Sale of Telesat

</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">On December&nbsp;18, 2006, we announced the sale
of our satellite service subsidiary Telesat. We
will, at closing, realize total proceeds of
$3,250&nbsp;million from the all-cash transaction. The
sale is subject to customary closing conditions,
including regulatory approval both in Canada and
the United States and the absence of a material
adverse change affecting Telesat&#146;s business, and
is expected to close in mid-2007. In conjunction
with the sale, we have put into place a set of
commercial arrangements between Telesat and Bell
ExpressVu that guarantees Bell ExpressVu access
to current and expanded satellite capacity. Since
we will have ongoing business arrangements with
Telesat, it will not be accounted for as
discontinued operations.</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;79
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Note 5: Restructuring and Other Items</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following tables provide a summary of the
costs recognized in 2006 as well as the
corresponding liability as at December&nbsp;31, 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(93</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,063</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(72</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(49</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss on long-term contract</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(128</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Settlement with MTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(190</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(103</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Restructuring and other items</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(355</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(55</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,219</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CANADA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CONSOLI-</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AND BCE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ALIANT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">DATED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance in accounts payable
and accrued liabilities at
December&nbsp;31, 2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2006 restructuring costs <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Real estate <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(133</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(20</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(153</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance in accounts payable
and accrued liabilities at
December&nbsp;31, 2006</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="font-size:3pt">&nbsp;</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Excludes amounts related to net
benefit plans cost ($5&nbsp;million).</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><I>(2)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Excludes amounts related to
real estate impairment charges ($3
million).</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RESTRUCTURING COSTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, we recorded restructuring charges of
$165&nbsp;million consisting of:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;charges at Bell Canada and BCE of $82
million related to restructuring initiatives for
the involuntary departure of approximately 1,780&nbsp;employees
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;charges at Bell Aliant of $11&nbsp;million
related to restructuring initiatives
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;charges at Bell Canada of $72&nbsp;million
for relocating employees and closing real estate
facilities that are no longer needed because of
the reduction in the workforce from our 2004 to
2006 restructuring initiatives bringing our
cumulative expense since 2004 to $125&nbsp;million. We
expect to spend approximately $35&nbsp;million for
relocating employees and closing real estate
facilities no longer needed as part of our 2005
and 2006 restructuring initiatives that will be
expensed as incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, as part of our new initiative of
relocating employees to campus environments in
Calgary, Toronto and Montr&#233;al, to be complete by
2009, we expect to spend approximately $12
million for relocation costs and $94&nbsp;million for
lease vacancy costs, beginning in 2008 and
extending up to 2024.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2005, we recorded restructuring charges
of $55&nbsp;million consisting of:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;charges of $51&nbsp;million related to
restructuring initiatives for the involuntary
departure of approximately 950 employees
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;charges of $49&nbsp;million for
relocating employees and closing real estate
facilities that are no longer needed because of
the reduction in the workforce from the 2004
employee departure program.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These charges were partly offset by
reversals of restructuring provisions of $45
million relating to the 2004 employee departure
program that were no longer necessary since
actual payments were lower than estimated.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2004, Bell Canada recorded a restructuring
charge of $985&nbsp;million related to approximately
5,000 voluntary employee departures under the
departure program announced in June&nbsp;2004. The
program consisted of two phases:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;an early retirement plan &#150; 3,950
employees chose to receive a package that
included a cash allowance, immediate pension
benefits, an additional guaranteed pension
payable up to 65&nbsp;years of age, career transition
services and post-employment benefits
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;a departure plan &#150; 1,050 employees
chose to receive a special cash allowance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The 2004 employee departure program is complete and the remaining payments extend to 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada also recorded a charge of $11&nbsp;million
for relocating employees and closing real estate
facilities that were no longer needed because of
the employee departure program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2004, Bell Aliant recorded a
restructuring charge of $67&nbsp;million relating to
its employee departure program. Under this
program, 693&nbsp;employees chose to receive a cash
allowance. The program is complete and the
remaining payments extend to 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">80&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">LOSS ON LONG-TERM CONTRACT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2001, we entered into a contract with the
Government of Alberta to build a next-generation
network to bring high-speed Internet and
broadband capabilities to rural communities in
Alberta. In 2004, we identified cost overruns on
the contract and recorded a charge of $128&nbsp;million.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SETTLEMENT WITH MTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;20, 2004, Bell Canada filed a lawsuit
against MTS after MTS announced it would purchase
Allstream Inc. (Allstream). Bell Canada sought
damages and an injunction that would prevent MTS
from breaching the terms and conditions of the
commercial agreements it had with Bell Canada. On
June&nbsp;3, 2004, Bell Canada also filed a lawsuit
against Allstream seeking damages related to the
same announcement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;30, 2004, BCE Inc. reached an
agreement with MTS to settle the lawsuits. The
terms of the settlement included a payment of $75&nbsp;million by MTS to Bell Canada for unwinding
various commercial agreements and the orderly
disposition of our interest in MTS. Our voting
rights in MTS were waived after receiving the $75
million payment. We sold our interest in MTS in
December&nbsp;2004. See Note 6, <I>Other Income</I>, for more
information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">OTHER CHARGES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2006, we recorded other charges
totalling $190&nbsp;million. These charges consisted
mainly of costs related to the formation of Bell
Aliant, costs we incurred for the Bell income
trust initiative and the simplification of our
corporate structure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The costs associated with the formation of Bell
Aliant consisted mainly of investment banking,
professional and consulting fees. Of the total
transaction costs, $133&nbsp;million was paid in 2006
and is reflected as cash flows used in investing
activities in the statement of cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2004, we recorded other charges
totalling $103&nbsp;million. These costs consisted
mostly of future lease costs for facilities that
were no longer needed, asset write-downs and
other provisions, net of a reversal of previously
recorded restructuring charges that were no
longer necessary because of the introduction of a
new employee departure program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 6: Other (Expense) Income</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="4">2004</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Premium on redemption of Bell Aliant debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(148</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net (losses)&nbsp;gains on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(26</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">351</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>58</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capitalized interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securitization losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(57</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(34</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(26</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Canada International Inc. (BCI)&nbsp;loss monetization charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B>
</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Loss) income from cost and equity investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(7</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Foreign currency (losses)&nbsp;gains</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(4</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(5</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other (expense)&nbsp;income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(176</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">439</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">PREMIUM ON REDEMPTION OF BELL ALIANT DEBT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, Bell Aliant recorded a $148&nbsp;million
charge for premium costs on early redemption of
Bell Aliant debt. Included in the total charge
for the year is a premium cost of $122&nbsp;million as
a result of the formation of Bell Aliant:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;$40&nbsp;million, incurred on June&nbsp;30, 2006,
on the early redemption of all of its outstanding
10.75% First Mortgage Bonds, Series&nbsp;T and, on
July&nbsp;4, 2006, the early redemption of all of its
outstanding 11.4% First Mortgage Bonds, Series&nbsp;V
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;$82&nbsp;million, incurred on July&nbsp;4, 2006,
at which date Bell Aliant redeemed all of its
outstanding 8.30% Debentures, Series&nbsp;2; 9.70%&nbsp;Debentures, Series&nbsp;4; 9.05% Debentures, Series&nbsp;5;
10.6% First Mortgage Bonds, Series&nbsp;T; 11.15%
First Mortgage Bonds, Series&nbsp;U; 9.77%&nbsp;First
Mortgage Bonds, Series&nbsp;V; and 8.76% First
Mortgage Bonds, Series&nbsp;W.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">NET (LOSSES)&nbsp;GAINS ON INVESTMENTS

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, net losses on investments of $26
million included a loss of $36&nbsp;million as a
result of our decision to exit a line of business
partly offset by a $9&nbsp;million gain on the
acquisition of Nortel Networks Inc. (Nortel)
shares by the Bell Canada pension fund.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gains on investments of $38&nbsp;million in 2005 were from:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;a $39&nbsp;million dilution gain in our
interest in TerreStar Networks Inc., a mobile
satellite services company
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;other net losses on investments of $1&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net gains on investments of $351&nbsp;million in 2004
were from:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;a $108&nbsp;million gain from the sale of
Bell Canada&#146;s remaining 3.24% interest in YPG General
Partner Inc. (YPG)&nbsp;for net cash proceeds of $123
million
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;a $217&nbsp;million gain from the sale of
BCE Inc.&#146;s 15.96% interest in MTS for net cash proceeds of
$584&nbsp;million.
On August&nbsp;1, 2004, the MTS shares were
transferred from Bell Canada to BCE Inc. as part
of a corporate reorganization. The purpose of
this reorganization was to ensure that capital
loss carryforwards at BCE Inc. would be available
to be utilized against the gain on the sale of
the MTS shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;other net gains on investments of $26
million.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 7: Interest Expense</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense on long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>909</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">916</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense on other debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>43</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total interest expense</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>952</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">961</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note
8: Income Taxes</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table reconciles the amount of
reported income tax expense in the statements of
operations with income tax expense at Canadian
statutory rates of 34.7% in 2006, 34.4% in 2005,
and 34.4% in 2004.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%"><B>&nbsp;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes computed at
statutory rates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(765</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(976</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(733</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Savings from BCI
monetization transaction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Recognition of previously
unrecognized capital loss
carryforwards <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>434</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net gains on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(19</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Large corporations tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>19</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(31</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(34</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Change in statutory rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>56</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-taxable portion of Bell Aliant&#146;s income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>53</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>137</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total income tax expense</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(85</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(803</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(605</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 0pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>In 2006, we recognized a future tax asset of
$434&nbsp;million representing the tax-effected amount
of approximately $2,341&nbsp;million of previously
unrecognized capital loss carryforwards as
realization of the loss carryforwards now is more
likely than not due to the anticipated gain on
the sale of Telesat.</I></TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the significant
components of income tax expense that related to
earnings from continuing operations.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%"><B>&nbsp;</B></TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(98</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(84</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(684</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Future income taxes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Recognition and utilization
of loss carryforwards</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>138</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(234</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(27</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Change in statutory rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>56</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Change in temporary
differences and other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(181</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(485</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total income tax expense</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(85</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(803</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(605</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">82&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows future income taxes
resulting from temporary differences between the
carrying amounts of assets and liabilities for
accounting purposes and the amounts used for tax
purposes, as well as tax loss carryforwards.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%"><B>&nbsp;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-capital loss carryforwards</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>191</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">487</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital loss carryforwards</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>457</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(779</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(498</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Indefinite-life intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(437</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(442</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investment tax credits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(155</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(69</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Scientific research and experimental
development expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>154</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Employee benefit plans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>66</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>23</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(962</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,082</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total future income taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,442</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,461</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Future income taxes are comprised of:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Future income tax asset &#150;
current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>662</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">310</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Future income tax asset &#150;
long-term portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>255</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">342</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Future income tax liability &#150;
current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(9</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Future income tax liability &#150;
long-term portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,350</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,108</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total future income taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,442</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,461</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At December&nbsp;31, 2006, BCE had $627&nbsp;million in
non-capital loss carryforwards. We:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;recognized a future tax asset of
$191&nbsp;million for financial reporting purposes
for approximately $543&nbsp;million of the non-capital
loss carryforwards. Of the total, $459&nbsp;million
expires in varying annual amounts until the end
of 2016. The balance expires in varying annual
amounts from 2017 to 2026.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;did not recognize a future tax asset
for financial reporting purposes for
approximately $84&nbsp;million of the non-capital loss
carryforwards. Of the total, $44&nbsp;million expires
in varying annual amounts until the end of 2016.
The balance expires in varying annual amounts
from 2017 to 2026.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At December&nbsp;31, 2006, BCE had $3,075&nbsp;million in
capital loss carryforwards, which can be carried
forward indefinitely. We:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;recognized a future tax asset of $457
million for financial reporting purposes for
approximately $2,481&nbsp;million of the capital loss
carryforwards
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;did not recognize a future tax asset
for financial reporting purposes on the balance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BCI LOSS MONETIZATION TRANSACTION
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On April&nbsp;15, 2005, 3787915 Canada Inc., a
wholly-owned subsidiary of Bell Canada, acquired
$17&nbsp;billion in preferred shares from 3787923
Canada Inc., a wholly-owned subsidiary of BCI.
3787923 Canada Inc. used the proceeds to advance
$17&nbsp;billion to BCI through a subordinated
interest-free loan. BCI then advanced $17&nbsp;billion
to 3787915 Canada Inc. by way of a subordinated
interest-bearing demand loan, the funds being
used to repay a daylight loan granted to 3787915
Canada Inc. to make the initial preferred share
investment. The dividend rate on the preferred
shares was equal to 5.1%, which was essentially
the same as the interest rate on the loan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This transaction was unwound on August
18, 2005, and was part of a tax loss
consolidation strategy that followed the
transaction steps laid out in an advance tax
ruling granted by the Canada Revenue Agency to
Bell Canada and BCI. The transaction also
received the approval of the Ontario Superior
Court of Justice, which is supervising BCI&#146;s
voluntary plan of arrangement pursuant to which
BCI is monetizing its assets and resolving
outstanding claims against it, with the ultimate
objective of distributing the net proceeds to its
shareholders and dissolving the company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3787915 Canada Inc. had the legal right
and intention to offset the demand loan payable
to BCI and the investment in preferred shares of
3787923 Canada Inc. As a result, these items and
the related interest expense and dividend income
were presented on a net basis. The tax savings of
$99&nbsp;million resulting from the interest expense
were presented as a reduction of income tax
expense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2006, BCE contributed to BCI an
amount of $61&nbsp;million in partial satisfaction of
its obligation with respect to the BCI income tax
loss monetization transaction. See Note 9,
<I>Discontinued Operations</I>.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;83
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Note 9: Discontinued Operations</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%"><B>&nbsp;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CTVglobemedia</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CGI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>63</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Emergis Inc. (Emergis)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">BCI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>52</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(7</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net gain from discontinued
operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summarized statement
of operations for the discontinued operations.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%"><B>&nbsp;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>989</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,397</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating gain from discontinued
operations, before tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>78</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">255</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Future income tax asset
impairment charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(56</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gain (loss)&nbsp;from discontinued
operations, before tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>106</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax expense on
operating gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(32</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(118</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(116</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax expense on gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(14</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-controlling interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(22</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(66</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net gain from discontinued
operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of cash
provided by discontinued operations.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%"><B>&nbsp;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flows (used in) from
operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(74</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">265</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flows from (used in)
investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,534</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(120</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(126</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flows from (used in)
financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>627</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(125</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">373</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash provided by discontinued
operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,087</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CTVGLOBEMEDIA
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;30, 2006, we reduced our interest
in CTVglobemedia to 20% from 68.5% and we
received net proceeds of approximately $665&nbsp;million. The proceeds were offset by the
deconsolidation of CTVglobemedia&#146;s cash on hand of $35&nbsp;million.
The net loss on disposition
was $4&nbsp;million. Included in the net assets sold
was goodwill of $1,920&nbsp;million. In January&nbsp;2006,
we received $607&nbsp;million as a return of capital
after the recapitalization of CTVglobemedia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;2006, CTVglobemedia completed
its takeover bid for CHUM Limited (CHUM). As a
result of the transaction our interest in
CTVglobemedia was reduced to 15%. Our remaining
investment in CTVglobemedia is accounted for
using the cost method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We still retain certain important rights and
have entered into a commercial agreement with
CTVglobemedia to have access to existing and
future content. These rights do not constitute
continuing involvement with CTVglobemedia.
CTVglobemedia was presented previously in the
Other BCE segment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">BCI
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In June&nbsp;2006, BCE contributed to BCI an
amount in satisfaction of its $61&nbsp;million
obligation with respect to the BCI income tax
loss monetization transaction. In addition, as
part of its liquidation process, BCI made a
return of capital to BCE of $156&nbsp;million on which
we recorded a gain of $52&nbsp;million.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CGI
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;16, 2005, we announced our
decision to sell our investment in CGI and that
CGI would purchase 100&nbsp;million of the Class&nbsp;A
shares held by us and we have accounted for CGI
as a discontinued operation. CGI was previously
presented in the Other BCE segment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;12, 2006, CGI bought 100&nbsp;million of its Class&nbsp;A shares
from us and we realized total net proceeds of $849&nbsp;million. The
proceeds were offset by the deconsolidation of CGI&#146;s cash on
hand of $81 million. The gain on disposition
was $79&nbsp;million. Included in the net assets sold was goodwill of $674
million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;6, 2006, we exercised our CGI
warrants to acquire Class&nbsp;A shares at a cost of
$21&nbsp;million. In addition, we recorded a loss of
$17&nbsp;million in the second quarter of 2006, which
represented a write-down of our remaining
investment in CGI, which was available for sale,
to fair market value based on its stock price at
June&nbsp;30, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Included in the net gain from discontinued operations
in 2006 is a loss of $1&nbsp;million, which
represented a further write-down of our
investment in CGI as a result of the Bell Canada
pension fund&#146;s acquisition of our remaining 31.4&nbsp;million CGI shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">EMERGIS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In June&nbsp;2004, we completed the sale of our
63.9% interest in Emergis by way of a secondary
public offering.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2004, Bell Canada paid $49&nbsp;million
to Emergis for:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;the purchase of Emergis&#146; Security Business
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;the early termination of the Bell Legacy Contract on June&nbsp;30, 2004 rather than December
31, 2004
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;the transfer of related
intellectual property to Bell Canada.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">84&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These transactions were recorded on a net
basis. The net proceeds from the sale of Emergis
were $285&nbsp;million (net of $22&nbsp;million of selling
costs and a $49&nbsp;million consideration given to
Emergis). The gain on the transaction was $58
million.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The operating loss includes a future income
tax asset impairment charge of $56&nbsp;million ($36
million after non-controlling interest), which
Emergis recorded before the sale as a result of
the unwinding of tax loss utilization strategies
that had been in place between Emergis, 4122780
Canada Inc. (a wholly-owned subsidiary of
Emergis) and Bell Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Emergis completed the sale of its US Health
operations in March&nbsp;2004 for US$223&nbsp;million in
cash. The loss on the transaction was $87&nbsp;million
($160&nbsp;million after non-controlling interest and
BCE Inc.&#146;s incremental goodwill), which was recorded in
December&nbsp;2003. Emergis was presented previously
as a separate segment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 10: Earnings Per Share</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a reconciliation of the numerator and the denominator used in the
calculation of basic and diluted earnings per common share from continuing operations.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%"><B>&nbsp;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Earnings from continuing operations (numerator)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,891</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,395</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(70</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations &#150; basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,821</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,325</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Weighted average number of common shares outstanding
(denominator) </B>(in millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average number of common shares outstanding &#150; basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>861.4</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">924.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assumed exercise of stock options <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Weighted average number of common shares outstanding &#150; diluted</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>861.6</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">927.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">925.2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="font-size:3pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>The calculation of the assumed exercise of stock options includes the effect of the average
unrecognized future compensation cost of dilutive options. It does not include anti-dilutive
options. These are options that would not be exercised because their
exercise price is higher than the average market value of a BCE Inc. common share for each of the
periods shown in the table. The number of excluded options was 18,479,608 in 2006, 24,466,767 in
2005 and 26,693,305 in 2004.</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 11: Accounts Receivable</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%"><B>&nbsp;</B></TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trade accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,573</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,470</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for doubtful accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(106</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(125</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for revenue adjustments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(112</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(118</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>97</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investment tax credits receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>312</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>104</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total accounts receivable</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,868</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,525</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SECURITIZATION OF ACCOUNTS RECEIVABLE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Canada sold an interest in a pool of
accounts receivable to a securitization trust for
a total of $1.2&nbsp;billion in cash at December&nbsp;31,
2006 ($1.2&nbsp;billion at December&nbsp;31, 2005) under a
revolving sales agreement that was extended to
December&nbsp;31, 2011. Bell Canada had a retained
interest of $136&nbsp;million in the pool of accounts
receivable at December&nbsp;31, 2006 ($133&nbsp;million at
December&nbsp;31, 2005), which equals the amount of
over-collateralization in the receivables sold.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Aliant sold an interest in a pool of
accounts receivable to a securitization trust for
a total of $120&nbsp;million in cash at December&nbsp;31,
2006 ($120&nbsp;million at December&nbsp;31, 2005) under a
revolving sales agreement that was extended to
July&nbsp;7, 2011. Bell Aliant had a retained interest
of $49&nbsp;million in the pool at December&nbsp;31, 2006
($39&nbsp;million at December&nbsp;31, 2005).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada and Bell Aliant continue to
service these accounts receivable. The buyer&#146;s interest in the collection of
these accounts receivable ranks ahead of the
interests of Bell Canada and Bell Aliant, which
means that Bell Canada and Bell Aliant are
exposed to certain risks of default on the amount
securitized. They have provided various credit
enhancements in the form of overcollateralization
and subordination of their retained interests.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The buyers will reinvest the amounts
collected by buying additional interests in the
Bell Canada and Bell Aliant accounts receivable
until the agreements
expire. The buyers and their investors have
no claim on Bell Canada&#146;s and Bell Aliant&#146;s other assets if
customers do not pay amounts owed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2006, we recognized a loss of $57&nbsp;million
on the revolving sale of accounts receivable for
the combined securitizations, compared to losses
of $34&nbsp;million in 2005 and $26&nbsp;million in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows balances for the
combined securitizations at December&nbsp;31, 2006 and
the assumptions that were used in the model on
the date of transfer and at December&nbsp;31, 2006. A
10% or 20% adverse change in each of these
assumptions would have no significant effect on
the current fair value of the retained interest.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RANGE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securitized interest in
accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,338</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,354</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retained interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>185</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Servicing liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">
Average accounts
receivable managed</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,972</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assumptions:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of funds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" nowrap>2.90%&#150;4.20</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>4.20</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.86</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average
delinquency ratio</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" nowrap>11.62%&#150;12.32</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>11.69</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">12.32</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average net
credit loss ratio</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.51%&#150;0.76</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>0.76</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.56</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average
life (days)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36&#150;37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>36</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Servicing fee liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>2.00</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of certain cash flows received from and paid to the trusts
during the year.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Collections reinvested in revolving sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>18,611</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,724</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Decrease) increase in sale proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(16</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">229</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 12: Other Current Assets</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Future income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>662</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">310</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>329</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">335</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Prepaid expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>234</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">191</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total other current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,233</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">915</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 13: Capital Assets</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ACCUMULATED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NET BOOK</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ACCUMULATED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NET BOOK</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">COST</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AMORTIZATION</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VALUE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">COST</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AMORTIZATION</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VALUE</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Telecommunications assets
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Inside plant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>20,058</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>14,252</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,806</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,358</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,888</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Outside plant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>15,176</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9,931</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,245</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,030</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Station equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,910</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,455</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,455</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,344</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Machinery and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,949</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,587</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,362</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,311</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Buildings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,204</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,470</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,734</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,063</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,749</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Plant under construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,579</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,579</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,852</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Satellites</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,553</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>514</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,039</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,552</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,148</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>79</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>79</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>337</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>103</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>234</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">134</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total property, plant and
equipment</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>50,845</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>31,312</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>19,533</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48,704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,534</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Finite-life intangible assets
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Software</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,960</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,981</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,979</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,666</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Customer relationships</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>652</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>106</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>546</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">559</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>32</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>11</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>21</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total capital assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>55,489</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>33,410</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22,079</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,772</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">86&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The cost of assets under capital leases was $1,475&nbsp;million at December&nbsp;31, 2006, and $1,283
million at December&nbsp;31, 2005. Additions to assets under capital leases were $267&nbsp;million in 2006
and $564&nbsp;million in 2005. The net book value of these assets was $978&nbsp;million at December&nbsp;31, 2006,
and $887&nbsp;million at December&nbsp;31, 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of property, plant and
equipment was $2,506&nbsp;million in 2006, $2,511
million in 2005, and $2,499&nbsp;million in 2004.
Amortization of finite-life intangible assets was
$620&nbsp;million in 2006, $547&nbsp;million in 2005 and
$490&nbsp;million in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We capitalized interest costs of $13&nbsp;million
in 2006, $15&nbsp;million in 2005, and $19&nbsp;million in
2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions to finite-life intangible assets
were $631&nbsp;million in 2006 and $503&nbsp;million in
2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 14: Other Long-Term Assets</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued benefit asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,110</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">984</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Future income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>255</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">342</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments at cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>754</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">346</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investment tax credits receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>393</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">345</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments at equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred debt issuance costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>94</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term notes and other receivables</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>87</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred development costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>120</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total other long-term assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,816</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,306</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Amortization of deferred charges was $3&nbsp;million in 2006, $3&nbsp;million in 2005, and $11&nbsp;million in
2004.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 15: Indefinite-Life Intangible Assets</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Brand name</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,986</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,986</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Spectrum licences</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>900</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">897</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cable licences</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total indefinite-life intangible assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,902</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 16: Goodwill</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OTHER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BELL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OTHER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CONSOLI-</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RESIDENTIAL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BUSINESS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ALIANT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CANADA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BCE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">DATED</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance &#150; December&nbsp;31, 2005</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,671</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,831</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,966</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill arising from current
year acquisitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill arising from purchase
price
adjustments for 2005 acquisitions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distribution of Bell Aliant units</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(533</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(533</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance &#150; December&nbsp;31, 2006</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,679</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,848</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>700</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>150</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>98</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,475</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;87
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Note 17: Accounts Payable and Accrued Liabilities</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trade accounts payable and accruals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,614</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,535</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Compensation payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>486</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>475</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">441</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Taxes payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>207</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">244</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring costs payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>89</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>365</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total accounts payable and accrued liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,236</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,085</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 18: Debt Due Within One Year</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">WEIGHTED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">WEIGHTED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AVERAGE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AVERAGE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">INTEREST RATE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">MATURITY</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.25</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Notes payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.68</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="right">30 days</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>27</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt due within one
year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>950</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,070</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total debt due within one year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>986</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,161</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="font-size:3pt">&nbsp;</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">

    <TD colspan="3"><I>N/A: Not applicable.</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Restrictions

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some of the credit agreements:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>require us to meet specific financial ratios</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>require us to maintain a certain level of Bell Canada voting shares.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are in compliance with all conditions and restrictions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 19: Long-Term Debt</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">WEIGHTED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AVERAGE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">INTEREST RATE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">MATURITY</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>BCE Inc. &#150; Notes </B><SUP style="font-size: 85%; vertical-align: text-top"><B>(a)</B></SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.35</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>650</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Bell Canada </B><SUP style="font-size: 85%; vertical-align: text-top"><B>(b)</B></SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Debentures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.87</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2007&#150;2035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,025</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,479</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Debentures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.84</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2041&#150;2054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>700</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">700</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Subordinated debentures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.21</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2026&#150;2031</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>275</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.42</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2007&#150;2047</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>975</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">852</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>40</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total &#150; Bell Canada</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9,015</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,375</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Bell Aliant </B><SUP style="font-size: 85%; vertical-align: text-top"><B>(c)</B></SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-revolving term facility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Floating</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,235</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Debentures, notes and bonds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.19</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2007&#150;2020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,549</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,086</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>28</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total &#150; Bell Aliant</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,812</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,111</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Telesat &#150; Notes and other</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.78</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2007&#150;2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>253</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">340</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total debt</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,730</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,826</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unamortized premium <SUP style="font-size: 85%; vertical-align: text-top">(d)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>87</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: Amount due within one year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(950</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,070</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total long-term debt</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>11,867</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,855</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">88&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Restrictions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some of the debt agreements:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;require us to meet specific financial
ratios</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;impose covenants, maintenance
tests and new issue tests</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;require us to maintain a certain
level of Bell Canada voting shares.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are in compliance with all conditions and restrictions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(a)&nbsp;BCE Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, BCE Inc. redeemed early $1,050
million of debt that was due on October&nbsp;30, 2007.
The remaining $650&nbsp;million of debt is unsecured.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(b)&nbsp;Bell Canada
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All debentures are unsecured. They include:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" align="left"><B>&#149;</B>&nbsp;&nbsp;&nbsp;US$200&nbsp;million maturing in 2010, which
has been swapped into Canadian dollars</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" align="left"><B>&#149;</B>&nbsp;&nbsp;&nbsp;$125&nbsp;million of long-term debt, which
includes a call option that has been exercised,
allowing for the debt to be redeemed on February
15, 2007.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Capital leases include $336&nbsp;million in 2006 and
$353&nbsp;million in 2005, netted against loans
receivable of $244&nbsp;million in 2006 and $267
million in 2005. These obligations arose from
agreements that Bell Canada entered into in 1999
and 2001 to sell and lease back
telecommunications equipment for a total of $391
million. Some of the
proceeds were invested in interest-bearing loans
receivable. The capital lease obligations, net of
loans, were originally issued for US$39&nbsp;million
and have been swapped into Canadian dollars.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(c)&nbsp;Bell Aliant
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All debentures, notes and bonds are issued
under trust indentures and are unsecured with the
exception of T&#233;l&#233;bec&#146;s debentures, which are secured
by a mortgage on a property located in
the province of Qu&#233;bec. All notes, bonds and
debentures are issued in series and certain
series are redeemable at Bell Aliant&#146;s option
prior to maturity at the prices, times and
conditions specified in each series.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest rates on the non-revolving term
facility depend upon the form of borrowing
selected and Bell
Aliant&#146;s  credit rating. Prime rate based loans bear interest at the prime rate per annum while Canadian
Bankers&#146; Acceptance, U.S. LIBOR loans, letters of credit and
letters of guarantee bear interest at the base rate plus
0.50 per cent per annum. These rates may vary based on the
credit ratings of Bell Aliant&#146;s long-term debt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(d)&nbsp;Unamortized Premium
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This amount represents the unamortized
purchase price allocated to long-term debt
resulting from BCE&#146;s repurchase of SBC
Communications Inc.&#146;s 20% interest in Bell Canada
Holdings Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 20: Other Long-Term Liabilities</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Future income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,350</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,108</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued benefit liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,538</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,448</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred revenue on long-term contracts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>399</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">389</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred contract payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>168</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">199</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>386</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">663</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total other long-term liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,841</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,807</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;89
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Note 21: Non-Controlling Interest</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-controlling interest in subsidiaries:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">CTVglobemedia</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">817</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,063</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">675</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,080</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,516</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Preferred shares issued by subsidiaries:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,100</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">232</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Telesat</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,100</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,382</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total non-controlling interest</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,180</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,898</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 22: Financial Instruments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DERIVATIVES

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We use derivative instruments to manage our
exposure to interest rate risk, foreign currency
risk and changes in the price of BCE Inc. common
shares that may be issued under our compensation
plans (SCPs and DSUs). We do not use derivative
instruments for speculative purposes. Since we do
not trade actively in derivative instruments, we
are not exposed to any significant liquidity
risks relating to them.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following derivative instruments were
outstanding at December&nbsp;31, 2006:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;interest rate swaps that hedge interest rate
risk on a portion of our long-term debt
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;cross-currency swaps and forward
contracts that hedge foreign currency risk on a
portion of our long-term debt
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;forward contracts on BCE Inc.
common shares that hedge the fair value exposure
related to SCPs and DSUs.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CREDIT RISK
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are exposed to credit risk if
counterparties to our derivative instruments are
unable to meet their obligations. We expect that
they will be able to meet their obligations
because we deal with institutions that have
strong credit ratings and we regularly monitor
our credit risk and credit exposure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There was minimal credit risk relating to
derivative instruments at December&nbsp;31, 2006. We
are also exposed to credit risk from our
customers, but the concentration of this risk is
minimized because we have a large and diverse
customer base.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CURRENCY EXPOSURES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We use cross-currency swaps and forward
contracts to hedge debt that is denominated in
foreign currencies. We also use forward contracts
to hedge foreign currency risk on anticipated
transactions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal amount to be received under
currency contracts was US$482&nbsp;million at December
31, 2006. The principal amount to be paid under
these contracts was $623&nbsp;million at December&nbsp;31,
2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">90&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">INTEREST RATE EXPOSURES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We use interest rate swaps to manage the mix
of fixed and floating interest rates on our debt.
As at December&nbsp;31, 2006, the following interest
rate swaps with a notional amount of $1,950
million were outstanding:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;$700&nbsp;million of interest rate swaps
whereby we pay interest at a rate equal to the
three-month Canadian dollar offered rate (CDOR)
floating rate plus 0.42%. We receive interest on
these swaps at a rate of 5.0%. The swaps mature
in 2017.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;$500&nbsp;million interest rate swap whereby
we pay interest at a rate of 4.31%. We receive
interest on the swap at a rate equal to the
three-month CDOR floating rate. The swap matures
in 2012.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;$300&nbsp;million interest rate swap whereby
we pay interest at a rate of 4.90%. We receive
interest on the swap at a rate equal to the
three-month CDOR floating rate. The swap matures
in 2014.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;$200&nbsp;million interest rate swap whereby
we pay interest at a rate of 4.85%. We receive
interest on the swap at a rate equal to the
three-month CDOR floating rate. The swap matures
in 2017.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;$200&nbsp;million interest rate swap whereby
we pay interest at a rate of 5.02%. We receive
interest on the swap at a rate equal to the
three-month CDOR floating rate. The swap matures
in 2037.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;$50&nbsp;million interest rate swap whereby
we pay interest at a rate of 5.0%. We receive
interest on the swap at a rate equal to the
three-month CDOR floating rate. The swap matures
in 2037.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">FAIR VALUE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fair value is the amount that willing parties
would accept to exchange a financial instrument
based on the current market for instruments with
the same risk, principal and remaining maturity.
We base fair values on estimates using present
value and other valuation methods.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These estimates are affected by assumptions
we make about the amount and timing of estimated
future cash flows and discount rates, all of
which reflect varying degrees of risk. Potential
income taxes and other expenses that would be
incurred on disposition of these financial
instruments are not reflected in the fair values.
As a result, the fair values are not necessarily
the net amounts that would be realized if these
instruments were actually settled.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The carrying value of all financial instruments approximates fair value, except for those noted in
the following table.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CARRYING</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">FAIR</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CARRYING</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">FAIR</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VALUE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VALUE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VALUE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">VALUE</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investment in Nortel <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt due within one year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>950</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>956</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,079</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>11,867</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,127</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,855</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,523</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Derivative financial instruments, net
asset (liability)&nbsp;position:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Forward
contracts &#150; BCE Inc. shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Currency contracts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(58</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(77</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(90</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(120</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest rate swaps and swaptions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(26</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top:3pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>In 2006, the Nortel common shares were undesignated as a hedge of our exposure to outstanding
rights to SCPs and the Bell Canada pension plan acquired them from us. In 2005, we designated 4
million of our approximately 15&nbsp;million Nortel common shares to manage our exposure to outstanding
rights to SCPs.</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 23: Share Capital</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">PREFERRED SHARES

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s articles of amalgamation provide for an unlimited number of First Preferred Shares and
Second Preferred Shares. The terms set out in the articles
authorize BCE Inc.&#146;s directors to issue the shares in one or
more series and to set the number of shares and conditions for
each series.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;91
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of the principal terms of BCE Inc.&#146;s First Preferred
Shares. There were no Second Preferred Shares issued and outstanding at December&nbsp;31, 2006. BCE
Inc.&#146;s articles of amalgamation describe the terms and conditions of these shares in detail.
</DIV>

<DIV align="center">
<TABLE style="font-size: 7pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight: bold">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">STATED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">NUMBER OF SHARES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">CAPITAL</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ANNUAL</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">REDEMP-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">ISSUED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">AT</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">DIVIDEND</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CONVERT-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">CONVERSION</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">REDEMPTION</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TION</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AND OUT-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">DECEMBER 31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">
    <TD nowrap align="left">SERIES</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">RATE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">IBLE INTO</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">DATE</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="3">DATE</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">PRICE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AUTHORIZED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">STANDING</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Q</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">floating</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series R</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" nowrap>December 1, 2015</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">R</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">4.54%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series Q</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" nowrap>December 1, 2010</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" nowrap>December 1, 2010</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">floating</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series T</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" nowrap>November 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.50</TD>    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,279,791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">T</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">4.502%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series S</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">November 1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">November 1,2011</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,720,209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Y</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">floating</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series Z</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">December 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,147,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Z</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right"> 5.319%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series Y</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">December 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">December 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,852,620</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">  5.45%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series AB</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" nowrap>September 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" nowrap>September 1, 2007</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">510</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AB</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">floating</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series AA</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">September 1, 2012</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right"> 5.54%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series AD</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">March 1, 2008</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">March 1, 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">510</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">floating</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Series AC</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">March 1, 2013</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">At any time</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight: bold">1,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,670</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Voting Rights
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of the issued and outstanding preferred shares at December&nbsp;31, 2006 were non-voting, except
under special circumstances when the holders are entitled to one vote per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Entitlement to Dividends
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Holders of Series&nbsp;R, T, Z, AA and AC shares are entitled to fixed cumulative quarterly dividends.
The dividend rate on these shares is reset every five years, as set out in BCE Inc.&#146;s articles of
amalgamation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of Series&nbsp;S and Y shares are entitled to floating adjustable cumulative monthly
dividends. The floating dividend rate on these shares is calculated every month, as set out in BCE
Inc.&#146;s articles of amalgamation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Series&nbsp;Q, AB and AD shares are issued, their holders will be entitled to floating
adjustable cumulative monthly dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Conversion Features
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of the issued and outstanding preferred shares at December&nbsp;31, 2006 are convertible at the
holder&#146;s option into another associated series of preferred shares on a one-for-one basis
according to the terms set out in BCE Inc.&#146;s articles of amalgamation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Redemption Features
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. may redeem Series&nbsp;R, T, Z, AA and AC shares on the redemption date and every five years
after that date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc. may redeem Series&nbsp;S and Y shares at any time at $25.50 per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Series&nbsp;Q, AB and AD shares are issued, BCE Inc. may redeem them at any time at $25.50 per
share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;25, 2007, the articles of amalgamation of BCE Inc. were amended to create the
Series&nbsp;AE, AF, AG, AH, AI and AJ First Preferred Shares. These new series of shares were created in
furtherance of a plan of arrangement of Bell Canada whereby all of the issued and outstanding
series of preferred shares of Bell Canada having a stated capital of $1,100&nbsp;million as at December
31, 2006, were exchanged for a corresponding series of First Preferred Shares of BCE Inc. The
impact on our balance sheet will be a reclassification from our non-controlling interest to
preferred shares for the stated capital amount. This plan of arrangement became effective on
January&nbsp;31, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">COMMON SHARES AND CLASS B SHARES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s articles of amalgamation provide for an unlimited number of voting common shares
and non-voting Class&nbsp;B shares. The common shares and the Class&nbsp;B shares rank equally in the
payment of dividends and in the distribution of assets if BCE Inc. is liquidated, dissolved or
wound up, after payments due to the holders of preferred shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">92&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell
Canada Enterprises <I>2006 Annual Report</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides details about the outstanding common shares of BCE Inc. No Class&nbsp;B
shares were outstanding at December&nbsp;31, 2006 and 2005.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">2005 </TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">STATED</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">STATED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SHARES</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CAPITAL</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OF SHARES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">CAPITAL</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">927,318,916</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">16,806</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">925,935,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,781</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shares issued under employee stock option plan <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">1,246,932</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">35</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,383,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shares repurchased and cancelled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(45,151,666</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(805</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Share reduction <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(75,770,241</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(2,549</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px"><B>Outstanding,
end of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">807,643,941</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">13,487</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">927,318,916</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,806</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top:3pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Includes a $6&nbsp;million reclassification from contributed surplus relating to the exercise
of employees&#146; stock options.</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><I>(2)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Reduction of BCE Inc. common shares outstanding, in conjunction with a distribution of Bell
Aliant trust units, by way of return of capital, to holders
of BCE Inc. common shares.</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Normal Course Issuer Bid (NCIB)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;1, 2006, BCE Inc. announced its plan to repurchase 5% of its outstanding common shares
through a NCIB.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As at December&nbsp;31, 2006, BCE Inc. had repurchased and cancelled a total of 45&nbsp;million common
shares, representing the total common shares targeted for repurchase, for a total cash outlay of
$1.2&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Of the total amount, $805&nbsp;million represented stated capital and reduced the total value of
common shares, while $52&nbsp;million reduced the contributed surplus attributable to these common
shares. The remaining $384&nbsp;million was charged to the deficit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;12, 2006, BCE Inc. announced its plan to renew the share repurchase program for
an additional 12-month period to repurchase 5% of its outstanding common shares through a NCIB for
which we obtained approval from the TSX on February&nbsp;6, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dividend Reinvestment Plan
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The dividend reinvestment plan allows eligible common shareholders to use their dividends to buy
additional common shares. A trustee buys BCE Inc. common shares for the participants on the open
market, by private purchase or from BCE Inc. (where the shares are issued from treasury). BCE Inc.
chooses the method the trustee uses to buy the shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A total of 2,658,255 common shares were bought on the open market under this plan for $76
million in 2006. A total of 3,039,870 common shares were bought on the open market under this plan
for $91&nbsp;million in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table is a reconciliation of the contributed surplus balance during the year.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NOTE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance, beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">1,081</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,061</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gain on distribution of
Bell Aliant units</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">1,547</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Repurchase
of common shares &#150;
NCIB</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(52</TD>
    <TD align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(21</TD>
    <TD align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance,
end of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">2,555</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,081</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note
24: Stock-Based Compensation Plans</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Reflected in the consolidated statements of operations as operating expense are the
following stock-based compensation amounts:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Employee savings plans <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">46</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock options <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">8</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restricted share units <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">45</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Special compensation payments <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(3</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred share units</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">1</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred unit plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">3</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total
stock-based compensation expense</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">100</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top:3pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Prior periods have been adjusted to include stock-based compensation of Bell Aliant that
had been previously excluded.</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><I>(2)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>Includes recoveries of SCP expense as a result of forfeitures.</I></TD>
</TR>

</TABLE>



<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;93
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The ESP, stock option, RSU, SCP and DSU plan descriptions below relate only to BCE&#146;s
plans as these are the most significant plans.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">EMPLOYEE SAVINGS PLANS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ESPs are designed to encourage employees of BCE Inc. and its participating subsidiaries to own
shares of BCE Inc. Each year, employees who participate in the plans can choose to have up to a
certain percentage of their annual earnings withheld through regular payroll deductions in order to
buy BCE Inc. common shares. In some cases, the employer will also contribute up to a maximum
percentage of the employee&#146;s annual earnings to the plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each participating company decides on its maximum percentages. For Bell Canada, employees can
contribute up to 12% of their annual earnings. Bell Canada contributes up to 2%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trustee of the ESPs buys BCE Inc. common shares for the participants on the open market,
by private purchase or from BCE Inc. (where the shares are issued from treasury). BCE Inc. chooses
the method the trustee uses to buy the shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were 30,168 employees participating in the plans at December&nbsp;31, 2006. The total number
of common shares bought for employees was 6,395,865 in 2006 and 6,024,936 in 2005. At December&nbsp;31,
2006, 13,513,812 common shares were reserved for issuance under the ESPs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">STOCK OPTIONS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under BCE Inc.&#146;s long-term incentive plans, BCE Inc. may grant options to key employees to buy BCE
Inc. common shares. The subscription price is equal to the market value of the shares on the last
trading day before the grant comes into effect. At December&nbsp;31, 2006, 26,876,114 common shares
were authorized for issuance under these plans.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For options granted before January&nbsp;1, 2004, the right to exercise options generally vests or
accrues at 25% a year for four years of continuous employment from the date of grant, unless a
special vesting period applies. Options become exercisable when they vest and can generally be
exercised for a period of up to 10&nbsp;years from the date of grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For most options granted after January&nbsp;1, 2004, the right to exercise options vests after two
and three years of continuous employment from the date of grant and if a specific company-wide
performance target is met. Subject to achieving the specific performance target, 50% of the options
will vest after two years and the remaining 50% after three years. Options become exercisable when
they vest and can be exercised for a period of up to six years from the date of grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special vesting provisions may apply if:</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;there is a change of control of BCE Inc. and the
option holder&#146;s employment ends under certain
circumstances
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#149;&nbsp;&nbsp;&nbsp;the option holder is employed by a designated subsidiary of BCE Inc. and BCE Inc.&#146;s ownership interest
in that subsidiary falls below the percentage set out in
the plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of the status of BCE Inc.&#146;s stock option plans.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD align="left" style="font-weight:bold">&nbsp;</TD>
    <TD align="left" style="font-weight:bold">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD align="left" >&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">WEIGHTED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">WEIGHTED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">WEIGHTED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">AVERAGE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">AVERAGE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AVERAGE</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER OF</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">EXERCISE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER OF</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">EXERCISE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER OF</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 0px solid #000000">EXERCISE</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">SHARES</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">PRICE ($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">SHARES</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">PRICE ($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">SHARES</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD nowrap align="right" colspan="2">PRICE ($)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, January 1</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">27,342,735</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="font-weight:bold">$32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,481,679</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,750,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">485,372</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="font-weight:bold">$27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,481,924</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,911,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(1,246,932</TD>
    <TD nowrap align="left" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="font-weight:bold">$23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,383,234</TD>
    <TD nowrap align="right">)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,946,864</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expired/forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(2,339,327</TD>
    <TD nowrap align="left" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="font-weight:bold">$32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,237,634</TD>
    <TD nowrap align="right">)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,233,753</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px"><B>Outstanding,
December 31</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">24,241,848</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="font-weight:bold">$33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,342,735</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,481,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><B>Exercisable,
December 31</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">16,648,952</TD>
    <TD nowrap align="left" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="font-weight:bold">$35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,505,709</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,633,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">94&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides more information about BCE Inc.&#146;s stock option plans at December&nbsp;31,
2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">STOCK OPTIONS OUTSTANDING</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">STOCK OPTIONS EXERCISABLE</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">WEIGHTED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">WEIGHTED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">WEIGHTED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AVERAGE<BR>
 REMAINING</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">AVERAGE<BR>
 EXERCISE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">AVERAGE<BR>
 EXERCISE</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">RANGE OF EXERCISE PRICES</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LIFE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">PRICE ($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NUMBER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">PRICE ($)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Below $20</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">318,745</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">318,745</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$20-$29</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,277,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,868,374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$30-$39</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,033,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,849,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Over $40</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,611,942</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,611,942</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,241,848</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,648,952</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" colspan="2">$35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ASSUMPTIONS USED IN STOCK OPTION PRICING MODEL
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the assumptions used to determine the stock-based compensation expense
using the Black-Scholes option pricing model.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of stock options granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">485,372</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,481,924</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,911,576</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average fair value
per option granted ($)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">2</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average assumptions:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Dividend yield</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">4.4</TD>
    <TD nowrap align="right" style="font-weight:bold">%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Expected volatility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">17</TD>
    <TD nowrap align="right" style="font-weight:bold">%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">19</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">27</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Risk-free interest rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">4.1</TD>
    <TD nowrap align="right" style="font-weight:bold">%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Expected life (years)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">3.9</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Starting in 2004, most of the stock options granted contain a specific performance target
that must be met before the option can be exercised. This is reflected in the calculation of the
weighted average fair value per option granted.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">RESTRICTED SHARE UNITS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Since 2004, BCE Inc. grants RSUs to executives and other key employees. The value of an RSU
is always equal to the value of one BCE Inc. common share. Dividends in the form of additional
RSUs are credited to the participant&#146;s account on each dividend payment date and are equivalent
in value to the dividend paid on BCE Inc. common shares. Each executive is granted a specific
number of RSUs for a given performance period, based on his or her position and level of
contribution. At the end of each given performance period, RSUs vest if performance objectives
are met or are forfeited.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vested RSUs are paid in BCE Inc. common shares purchased on the open market, in cash or
through a combination of both, as the holder chooses.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of the status of RSUs.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">NUMBER OF RSUS</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, January 1</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">2,520,781</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,996,522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">3,090,144</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">504,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,986,513</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends credited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">89,773</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,657</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61,086</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(2,542,451</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(173,212</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(80,825</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(51,077</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><B>Outstanding,
December 31</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">2,985,035</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,520,781</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,996,522</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SPECIAL COMPENSATION PAYMENTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Before 2000, when BCE Inc. granted options to executives and other key employees, related rights
to SCPs were also often granted. SCPs are cash payments representing the amount that the market
value of the shares on the date of exercise of the related options exceeds the exercise price of
these options.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the distribution of Nortel common shares was made in 2000, the outstanding options
were cancelled and replaced with options to buy BCE Inc. common shares and options to buy Nortel
common shares. The related SCPs were adjusted accordingly.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For each right to an SCP held before the distribution, right holders now have rights
related to both BCE Inc. and Nortel common shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of SCPs outstanding at December&nbsp;31, 2006, was:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>292,150 relating to BCE Inc. common shares</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>216,864 relating to Nortel common shares.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A 1-for-10 consolidation of the issued and outstanding common shares of Nortel was effective
December 1, 2006 and the number of SCPs outstanding has been adjusted accordingly.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of the outstanding SCPs cover the same number of shares as the options that they relate
to. It is the employer&#146;s responsibility to make the payments under the SCPs.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;95
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DEFERRED SHARE UNITS

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Eligible bonuses may be paid in the form of DSUs when executives or other key employees elect or
are required to participate in the plan. For non-management directors, their compensation is paid
in DSUs until the minimum share ownership requirement is met or as elected by the directors
thereafter.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The value of a DSU is always equal to the value of one BCE Inc. common share. Dividends in
the form of additional DSUs are credited to the participant&#146;s account on each dividend payment
date and are equivalent in value to the dividends paid on BCE Inc. common shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DSUs are paid in BCE Inc. common shares purchased on the open market following the cessation
of a participant&#146;s employment or when a director leaves the board.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of the status of DSUs.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">NUMBER OF DSUS</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, January 1</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">984,648</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">886,714</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">703,995</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">358,993</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">173,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">306,225</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends credited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">54,597</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,226</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(110,816</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(115,892</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(160,732</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px"><B>Outstanding,
December 31</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">1,287,422</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">984,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">886,714</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">DEFERRED UNIT PLAN
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bell Aliant is currently finalizing a deferred unit plan for certain of their executives and
senior management to further align their long-term incentive compensation with their total
unitholder returns. The framework for this new plan has been approved by their board of
trustees and is expected to be finalized in early 2007 when an initial grant will be issued for
the service period from 2006 to 2008.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note
25: Employee Benefit Plans</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We provide pension, other retirement and post-employment benefits for almost all of our
employees. These include DB pension plans and DC&nbsp;pension plans.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pension benefits:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">DB plans cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">DC plans cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other future benefits cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">156</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net
benefit plans cost</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">513</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">241</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">96&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">COMPONENTS OF DEFINED BENEFIT PLANS COST
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the DB plans cost before and after recognizing its long-term nature.
The recognized net benefit plans cost reflects the amount reported in our statements of
operations and is calculated according to our accounting policy.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">PENSION BENEFITS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">OTHER BENEFITS</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current service cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">268</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">28</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest cost on accrued benefit obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">851</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">111</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Actual return on plan assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(1,723</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,545</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,047</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(17</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Past service costs (credits)&nbsp;arising during period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">38</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(55</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(120</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Actuarial loss (gain)&nbsp;on accrued benefit obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(9</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,747</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">79</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Elements of employee future benefit plans cost, before recognizing its
long-term nature</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(575</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">794</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">146</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">247</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Excess (deficiency)&nbsp;of actual return over expected return <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">737</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">5</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferral of amounts arising during period:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Past service (costs)&nbsp;credits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(38</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(75</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">55</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(14</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Actuarial
(loss)&nbsp;gain on accrued benefit obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">9</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,747</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(754</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(79</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(499</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(102</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization of previously deferred amounts:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&nbsp;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net past service costs (credits)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">12</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(5</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net actuarial losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">167</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">19</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Transitional (asset)&nbsp;obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" style="font-weight:bold">(6</TD>
    <TD nowrap align="right" style="font-weight:bold">)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(43</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">24</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Curtailment gain <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&#151;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&#151;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Adjustments to recognize long-term nature of employee future benefit plans
cost</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">881</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,029</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(723</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">19</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(394</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(91</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase (decrease)&nbsp;in valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">12</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(24</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&#151;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">2</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">&#151;</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>DB plans
cost, recognized</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">320</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="font-weight:bold">165</TD>
    <TD nowrap align="right" style="font-weight:bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">156</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top:3pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><I>(1)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>The expected return on plan assets for a given year is calculated based on the
market-related value of plan assets at the beginning of that year.
The market-related value of pension plan assets was $13,192&nbsp;million at January&nbsp;1, 2006, $12,691
million at January&nbsp;1, 2005, and $12,820&nbsp;million
at January&nbsp;1, 2004.</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><I>(2)</I></TD>
    <TD>&nbsp;</TD>
    <TD><I>2005 includes a curtailment gain associated with the phase-out, over three years, of a
discretionary allowance program.</I></TD>
</TR>

</TABLE>



<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp;<I>2006 Annual Report</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;97
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">COMPONENTS OF ACCRUED BENEFIT ASSET (LIABILITY)

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the change in benefit obligations, change in fair value of plan
assets and the funded status of the DB plans.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"> PENSION BENEFITS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">OTHER BENEFITS</TD>

</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued benefit obligation, beginning of the year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,213</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,179</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,770</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Current service cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>268</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>28</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest cost on accrued benefit obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>851</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>111</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Actuarial losses (gains)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(9</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,747</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>79</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">499</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Benefit payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(914</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(884</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(96</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(93</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Employee contributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Special termination costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(49</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(17</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Plan amendment <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>38</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(55</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(120</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Transfers from DC pension plans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Accrued benefit obligation, end of the year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,415</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,231</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,179</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fair value of plan assets, beginning of the year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,870</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,793</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>149</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">137</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Actual return on plan assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,723</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Benefit payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(914</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(884</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(96</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(93</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Employer contributions <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>431</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>96</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Employee contributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Transfers from DC pension plans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Fair value of plan assets, end of the year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>15,121</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,870</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>166</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">149</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Plan deficit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,294</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,343</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,065</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,030</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unamortized net actuarial losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,290</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>514</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">492</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unamortized net past service costs (credits)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>140</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(41</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unamortized transitional (asset)&nbsp;obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(20</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(26</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>163</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">186</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(115</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(103</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Accrued benefit asset (liability), end of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,001</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,429</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,353</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued benefit asset included in other long-term assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,110</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued benefit liability included in other long-term
liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(109</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(95</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,429</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,353</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2005 includes a curtailment gain associated with the phase-out, over the next three years, of a
discretionary allowance program.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt"><DIV style="margin-left:30px; text-indent:-30px"><I>(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2006, the Bell Canada pension fund acquired from us 14.9&nbsp;million Nortel shares, 31.4&nbsp;million
CGI shares and other marketable securities having an aggregate market value of $284&nbsp;million. These
acquisitions reduced our cash contributions in 2006.</I></div>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For DB pension plans with an accrued benefit obligation that was more than plan assets:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the accrued benefit obligation was $16,008&nbsp;million at December&nbsp;31, 2006, and $15,956
million at December&nbsp;31, 2005
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the fair value of plan assets was $14,667&nbsp;million at December&nbsp;31, 2006, and $13,596
million at December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For DB pension plans with an accrued benefit obligation that was less than plan assets:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the accrued benefit obligation was $407&nbsp;million at December&nbsp;31, 2006, and $257&nbsp;million at
December&nbsp;31, 2005
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the fair value of plan assets was $454&nbsp;million at December&nbsp;31, 2006, and $274&nbsp;million at
December&nbsp;31, 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SIGNIFICANT ASSUMPTIONS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We used the following key assumptions to measure the accrued benefit obligation and the net
benefit plans cost for the DB pension plans and plans that provide other employee future benefits.
These assumptions are long-term, which is consistent with the nature of employee benefit plans.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">98&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">PENSION BENEFITS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000">OTHER BENEFITS</TD>

</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>At December&nbsp;31</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued benefit obligation:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discount rate, end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>5.3</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>5.3</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.2</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Rate of compensation increase, end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>3.0</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>3.0</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>For the year ended December&nbsp;31</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net benefit plans cost:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:30px; text-indent:-15px">Discount rate, end of preceding year <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>5.4</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>5.4</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Expected return on plan assets, end of preceding
year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>7.5</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>7.5</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Rate of compensation increase, end of preceding
year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>3.0</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>3.0</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left:21px; text-indent:-21px"><I>(1)&nbsp;The discount rate is an average for 2006 and at the end of the preceding year for 2005 and
2004. On July&nbsp;7, 2006, following the formation of Bell Aliant, the discount rate used to value our
pension obligations was increased to 5.6% from 5.2% to reflect the change in long-term market
interest rates at that time.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We assumed the following trend rates in health-care costs:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> an annual rate of increase of 4.5% in the cost per person of covered health-care benefits
for 2006 and the foreseeable future
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> an annual rate of increase of 10.5% in the cost of medication for 2006 and a gradual
decline to 4.5% over six years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Assumed trend rates in health-care costs have a significant effect on the amounts reported for the
health-care plans. The following table, for example, shows the effect of a 1% change in the assumed
trend rates in health-care costs.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">1% INCREASE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">1% DECREASE</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Effect on
other benefits &#150;<br>
total service and interest cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Effect on
other benefits &#150;<br>
accrued obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">236</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(220</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">PENSION PLAN ASSETS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The investment strategy for the major pension plans is to maintain a diversified portfolio of
assets, invested in a prudent manner to maintain the security of funds while maximizing returns
within our guidelines. The expected rate of return assumption is based on our target asset
allocation policy and the expected future rates of return on these assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the allocation of our pension plan assets at December&nbsp;31, 2006 and
2005, target allocations for 2006 and the expected long-term rate of return by asset class.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">WEIGHTED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">WEIGHTED</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">PERCENTAGE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AVERAGE</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AVERAGE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">OF PLAN</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">EXPECTED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TARGET</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6">ASSETS AT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">LONG-TERM</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">ALLOCATION</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="6" style="border-bottom: 1px solid #000000">DECEMBER 31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">RATE OF RETURN</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">ASSET CATEGORY</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right"><B>45%&#150;65</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>58</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">59</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>9.0</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Debt securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right"><B>35%&#150;55</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>42</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">41</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>5.5</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total/average</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>100</B></TD>
    <TD nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>7.5</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Equity securities included approximately $82&nbsp;million of BCE Inc. common shares or 0.5% of total
plan assets at December&nbsp;31, 2006, and approximately $62&nbsp;million of BCE Inc. common shares or 0.4%
of total plan assets at December&nbsp;31, 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt securities included approximately $10&nbsp;million of BCE Inc. and affiliates&#146; debentures or
0.1% of total plan assets at December&nbsp;31, 2006, and approximately $14&nbsp;million of BCE Inc. and
affiliates&#146; debentures or 0.1% of total plan assets at December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ESTIMATED FUTURE BENEFIT PAYMENTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the estimated future defined benefit payments for the next 10&nbsp;years
as at December&nbsp;31, 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">PENSION</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">OTHER</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BENEFITS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">BENEFITS</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">947</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2012&#150;2016</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,336</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">731</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total estimated future benefit payments</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,299</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 99
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">CASH FLOWS

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are responsible for adequately funding our DB pension plans. We make contributions to them
based on various actuarial cost methods that are permitted by pension regulatory bodies.
Contributions reflect actuarial assumptions about future investment returns, salary projections and
future service benefits.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We contribute to the DC pension plans as employees provide service.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the amounts we contributed to the DB and DC pension plans and the
payments made to beneficiaries under other employee future benefit plans.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">PENSION BENEFITS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">OTHER BENEFITS</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Aliant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>116</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bell Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>42</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>89</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">BCE Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Telesat</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>172</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>96</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Comprised of:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Contributions to DB plans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>147</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>96</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Contributions to DC plans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>25</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We expect to contribute approximately $270&nbsp;million to our defined benefit pension plans in
2007, subject to actuarial valuations being completed. We expect to pay approximately $100&nbsp;million
to beneficiaries under other employee benefit plans in 2007. We expect to contribute approximately
$30&nbsp;million to the DC pension plans in 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 26: Commitments and Contingencies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">CONTRACTUAL OBLIGATIONS

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of our contractual obligations at December&nbsp;31, 2006 that are
due in each of the next five years and after 2011.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">THERE-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">AFTER</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TOTAL</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt (excluding capital leases)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,754</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Notes payable and bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,063</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">771</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,619</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commitments for capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchase obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,295</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">988</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,864</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term liabilities (including current
portion)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">277</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,928</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,033</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">100 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Long-term debt and notes payable and bank advances include $1,344&nbsp;million drawn under our
committed credit facilities. They do not include $444&nbsp;million of letters of credit. The total
amount available under these committed credit facilities and under our commercial paper programs,
including the amount currently drawn, is $4.4&nbsp;billion. Current commercial paper credit lines expire
in August&nbsp;2009 and Bell Aliant&#146;s current commercial paper credit lines expire in July&nbsp;2011.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BCE Inc., Bell Canada and Bell Aliant may issue notes under their commercial paper programs up
to the amount of their supporting committed lines of credit. The total amount of these supporting
committed lines of credit available (net of letters of credit) was $1.7&nbsp;billion at December&nbsp;31,
2006. BCE Inc., Bell Canada and Bell Aliant had no commercial paper outstanding at December&nbsp;31,
2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bell Canada can issue up to $400&nbsp;million of Class&nbsp;E notes under its commercial paper programs.
These notes are not supported by committed lines of credit and may be extended in certain
circumstances. Bell Canada had no Class&nbsp;E notes outstanding at December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The imputed interest to be paid on capital leases is $474&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rental
expense relating to operating leases was $275&nbsp;million in 2006, $312&nbsp;million in 2005,
and $354&nbsp;million in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase obligations consist mainly of contractual obligations under service contracts. Our
commitments for capital expenditures include investments to expand and update our networks, and to
meet customer demand.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other long-term liabilities included in the table relate to:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Bell Canada&#146;s future payments over the remaining life of its contract with Amdocs
Canadian Managed Services, Inc. for the development of Bell Canada&#146;s billing system. The total
amount was $204&nbsp;million at December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;Telesat&#146;s deferred satellite performance incentive payments and their deferred milestone
payments. The total amount was $73&nbsp;million at December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At December&nbsp;31, 2006, we had other long-term liabilities that were not included in the table,
including an accrued employee benefit liability, future income tax liabilities, deferred revenue
and gains on assets and various other long-term liabilities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We did not include the accrued employee benefit liability and future income tax liabilities in
the table because we cannot accurately determine the timing and amount of cash needed for them.
This is because:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;future contributions to the pension plans depend largely on how well they are funded.
This varies based on the results of actuarial valuations that are performed periodically and on the
investment performance of the pension fund assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;future payments of income taxes depend on the amount of taxable earnings and on whether
there are tax loss carryforwards available to reduce income tax liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We did not include deferred revenue and gains on assets in the table because they do not represent
future cash payments.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">COMMITMENT UNDER THE CRTC DEFERRAL ACCOUNT MECHANISM
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;16, 2006, the CRTC issued Telecom Decision 2006-9, in which it estimated incumbent
telephone companies&#146; deferral account amounts, on an accumulated balance and future annualized
commitment basis, at May&nbsp;31, 2006. Bell Canada estimates its accumulated deferral account balance
at May&nbsp;31, 2006 to be $479&nbsp;million with an estimated future annualized commitment of $82&nbsp;million.
Bell Aliant&#146;s accumulated deferral account balance at May&nbsp;31, 2006 is estimated to be $8&nbsp;million
with no estimated future annualized commitment. Neither Bell Canada nor Bell Aliant can finalize
their estimates of deferral account balances since the outcome of certain outstanding regulatory
proceedings is unknown.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In Telecom Decision 2006-9, the CRTC made the following orders to clear the accumulated
balances in the deferral accounts:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;The CRTC first directed each Incumbent Local Exchange Carrier (ILEC)&nbsp;to allocate a
minimum of 5% of the accumulated balance in its deferral account to improve access to
telecommunication services for persons with disabilities
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp;As to the remaining 95% of the accumulated balance in the deferral account, the CRTC
addressed both broadband service investments and subscriber rebates. The CRTC concluded that each
ILEC could use funds in its
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 101
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">deferral accounts for initiatives to expand broadband services to rural and remote communities.
If an ILEC chooses not to invest in broadband expansion, or invests in such expansion but has money
left over in its deferral account, the remaining funds will be rebated to the ILEC&#146;s residential
local subscribers in non-high cost serving areas.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Telecom Decision 2006-9 also indicated that the future annual deferral account obligations of ILECs
are to be eliminated by reducing monthly prices for primary exchange service and optional local
services for residential customers in non-high cost serving areas. Bell Canada and certain other
ILECs filed rate proposals on May&nbsp;15, 2006 that became effective on June&nbsp;1, 2006. Bell Canada&#146;s
proposal eliminated approximately $68&nbsp;million of its estimated future annualized commitment. Bell
Canada believes that the impact of outstanding regulatory proceedings may absorb the remaining
annualized commitment. Telecom Decision 2006-9 also noted that the extension of the Second Price
Cap Period to May&nbsp;31, 2007 will result in an additional annual deferral account obligation. Under
this decision, Bell Canada&#146;s additional future annualized commitment is estimated to be $10
million. On May&nbsp;12, 2006, Bell Canada filed a Part&nbsp;VII application seeking the recovery of the
wireline-related costs associated with the implementation of wireless number portability from its
deferral account. The outcome of this application and of other outstanding proceedings could reduce
this additional obligation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The deferral account obligation will change as amounts are added to the account or the CRTC
approves initiatives that serve to reduce the deferral account obligation. On March&nbsp;17, 2006, Bell
Canada filed an application for leave to appeal this decision to the Federal Court of Appeal, to
the extent that it requires Bell Canada to give rebates in respect of rates that the CRTC had made
final in 2003. Another broader application for leave to appeal was also filed on behalf of consumer
groups. The Federal Court of Appeal granted Bell Canada&#146;s and the consumers groups&#146; respective
leave to appeal applications concerning Telecom Decision 2006-9 in Orders dated September&nbsp;22, 2006,
respectively. On May&nbsp;16, 2006, Barrett Xplore Inc., a broadband service provider, applied to the
Governor in Council to overturn the CRTC&#146;s determinations regarding the use of deferral account
funds by ILECs to expand the availability of broadband services. The same company filed an
application to the CRTC to review and vary Telecom Decision 2006-9 on June&nbsp;2, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;1, 2006 Bell Canada and Bell Aliant filed their proposals for clearing the
accumulated balances in their deferral accounts. Bell Canada proposed to use 5% of its estimated
accumulated balance for the implementation of initiatives that improve access to telecommunication
services for persons with disabilities, with the remaining 95% of the accumulated balance used to
expand broadband services over a five-year period to unserved areas in rural and remote
communities. Bell Aliant proposed to use 5% of its accumulated balance for the implementation of
initiatives that improve access to telecommunication services for persons with disabilities and
referred to its proposal filed May&nbsp;15, 2006 for clearing the remaining 95% of its accumulated
balance. On September&nbsp;28, 2006, the CRTC issued Telecom Decision 2006-64, in which it approved Bell
Aliant&#146;s application to increase its deferral account drawdown for the recovery of expenditures
related to its Service Improvement Plan program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;30, 2006, the CRTC issued Public Notice 2006-15 initiating a proceeding to assess
the proposals for broadband expansion and improving access to telecommunication services for
persons with disabilities filed September&nbsp;1, 2006 by Bell Canada as well as other incumbent
telephone companies. A decision in this proceeding is scheduled to be issued in January&nbsp;2008. Due
to the nature and number of uncertainties which remain concerning the disposition of accumulated
balances in the deferral account, we are unable to estimate the impact of the CRTC&#146;s decision on
our financial results at this time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">LITIGATION
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We become involved in various claims and litigation as a part of our business. This section
describes important legal proceedings that you should be aware of. While we cannot predict the
final outcome of the claims and litigation described below or of any other pending claims and
litigation at December&nbsp;31, 2006, based on the information currently available, management believes
that the resolution of these claims and litigation will not have a material and negative effect on
our consolidated financial position or results of operation. Based on the information currently
available, we believe that we have strong defenses and we intend to vigorously defend our position.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">102 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Teleglobe Lending Syndicate Lawsuit
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On July&nbsp;12, 2002, some members of the Teleglobe and Teleglobe Holdings (U.S.) Corporation
(collectively, Teleglobe) lending syndicate filed a lawsuit against BCE Inc. in the Ontario
Superior Court of Justice. The lawsuit includes several allegations, including that BCE Inc. and
its management, in effect, made a legal commitment to repay the advances the plaintiffs made as
members of the lending syndicate, and that the Court should disregard Teleglobe Inc. as a corporate
entity and hold BCE Inc. responsible to repay the advances as Teleglobe&#146;s alter ego.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;2, 2004, Canadian Imperial Bank of Commerce and Canadian Imperial Bank of
Commerce, N.Y. Agency withdrew from the lawsuit and on May&nbsp;3, 2005, BNP Paribas (Canada) also
withdrew from this lawsuit. BNP Paribas (Canada), which had advanced US$50&nbsp;million to Teleglobe, is
now pursuing a separate action against BCE Inc. and former Teleglobe directors and officers. The
remaining plaintiffs claim damages of US$1.04&nbsp;billion, plus interest and costs. This represents
approximately 83% of the US$1.25&nbsp;billion that the lending syndicate advanced to Teleglobe.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Kroll Restructuring Lawsuit
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2003, a lawsuit was filed in the Ontario Superior Court of Justice by Kroll
Restructuring Ltd., in its capacity as interim receiver of Teleglobe Inc., against five former
directors of Teleglobe Inc. This lawsuit was filed in connection with Teleglobe Inc.&#146;s redemption
of its third series preferred shares in April&nbsp;2001 and the retraction of its fifth series preferred
shares in March&nbsp;2001.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plaintiff is seeking a declaration that such redemption and retraction were prohibited
under the <I>Canada Business Corporations Act </I>and that the five former directors should be held
jointly and severally liable to restore to Teleglobe Inc. all amounts paid or distributed on such
redemption and retraction, being an aggregate of approximately $661&nbsp;million, plus interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;26, 2007, the five former directors filed a third-party claim in the Ontario
Superior Court of Justice against the former third series preferred shareholders of Teleglobe Inc.
As provided by the <I>Canada Business Corporations Act</I>, the third-party claim seeks to recover from
those former third series preferred shareholders any amounts the former directors may have to
restore to Teleglobe Inc. as a result of this lawsuit, on account of the redemption of the third
series preferred shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While BCE Inc. is not a defendant in this lawsuit, Teleglobe Inc. was at the relevant time a
subsidiary of BCE Inc. Pursuant to standard policies and subject to applicable law, the five former
Teleglobe Inc. directors are entitled to seek indemnification from BCE Inc. in connection with this
lawsuit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Teleglobe Inc. Unsecured Creditors Lawsuit
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;26, 2004, a lawsuit was filed in the United States Bankruptcy Court for the District of
Delaware. The United States District Court for the District of Delaware subsequently withdrew the
reference from the Bankruptcy Court and the matter is now pending in the District Court for the
District of Delaware. The lawsuit is against BCE Inc. and 10 former directors and officers of
Teleglobe and certain of its subsidiaries. The plaintiffs are comprised of Teleglobe Communications
Corporation, certain of its affiliated debtors and debtors in possession, and the Official
Committee of Unsecured Creditors of these debtors. The lawsuit alleges breach of an alleged funding
commitment of BCE Inc. towards the debtors, promissory estoppel, misrepresentation by BCE Inc. and
breach and aiding and abetting breaches of fiduciary duty by the defendants. The plaintiffs seek an
unspecified amount of damages against the defendants.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Teleglobe Inc. Plan Administrator Lawsuit
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;16, 2005, Kathy Morgan, in her capacity as Plan Administrator for Teleglobe Inc.,
filed a lawsuit in the Ontario Superior Court of Justice against BCE Inc. and seven former
directors of Teleglobe Inc. The plaintiff is seeking a declaration that Teleglobe Inc. and its
creditors have been oppressed by the former directors of Teleglobe Inc. and by BCE Inc. within the
meaning of the <I>Canada Business Corporations Act</I>. The plaintiff is also seeking a declaration that
the former directors of Teleglobe Inc. breached their fiduciary duty to Teleglobe Inc. and failed
to act in accordance with the standard of care prescribed under the <I>Canada Business Corporations
Act</I>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plaintiff is seeking compensation for oppression in the amount of $3&nbsp;billion and damages
for breach of fiduciary duty in the amount of $3&nbsp;billion, in each case plus interest and costs.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 103
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Purported Class&nbsp;Action Concerning Bell Canada and Bell Mobility Inc. (Bell Mobility) Late
Payment Charges
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;27, 2006, a motion to obtain the authorization to institute a class
action in Qu&#233;bec was served against Bell Canada and Bell Mobility in the province of Qu&#233;bec, in the
Qu&#233;bec City District of the Superior Court. The lawsuit was filed on behalf of all physical persons
and companies in Canada that were billed late payment charges by Bell Canada and Bell Mobility
despite the fact that customers allegedly paid amounts owing to Bell Canada and Bell Mobility to a
financial institution, by Internet, by telephone or by cheque within the payment period indicated
on their bills, and/or that suffered damages resulting from a payment allegedly made before the due
date, and/or that were allegedly billed, in the case of Qu&#233;bec residents, interest at a rate higher
than the legal rate. The lawsuit has not yet been authorized as a class action.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The motion seeks an order requiring Bell Canada and Bell Mobility to repay all late payment
charges to the members of the class. In addition to the reimbursement of such amounts, the class
action would, if authorized, also seek payment of damages and punitive damages by Bell Canada and
Bell Mobility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 27: Guarantees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a regular part of our business, we enter into agreements that provide for indemnifications
and guarantees to counterparties that may require us to pay for costs and losses incurred in
various types of transactions. We cannot reasonably estimate the maximum potential amount we could
be required to pay counterparties. While some of the agreements specify a maximum potential
exposure, many do not specify a maximum amount or limited period. The amount also depends on the
outcome of future events and conditions, which cannot be predicted. Historically, we have not made
any significant payments under these indemnifications or guarantees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table represents guarantees that BCE has entered into that have a fixed maximum
potential exposure, and their respective terms.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">INDEFI-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2011&#043;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">NITE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">TOTAL</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sale of assets and businesses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,645</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sale of services</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">181</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">Purchase and development of assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,861</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE also has guarantees where no maximum potential amount is specified.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SALE OF ASSETS AND BUSINESSES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of transactions involving business dispositions and sales of assets, we may be required
to pay counter-parties for costs and losses incurred as a result of breaches of representations and
warranties, loss or damages to property, environmental liabilities, changes in or in the
interpretation of laws and regulations (including tax legislation), valuation differences, earn-out
guarantees if the disposed business does not meet specific targets, contingent liabilities of a
disposed business, or reassessments of previous tax filings of the corporation that carries on the
business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A nominal amount has been accrued in the consolidated balance sheet relating to this type of
indemnification or guarantee at December&nbsp;31, 2006. Historically, we have not made any significant
payments under this type of indemnification or guarantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">104 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Consolidated Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SALE OF SERVICES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In transactions involving sales of services, we may be required to pay counterparties for costs
and losses incurred as a result of breaches of representations and warranties, or changes in or in
the interpretation of laws and regulations (including tax legislation).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No amount has been accrued in the consolidated balance sheet relating to this type of
indemnification or guarantee at December&nbsp;31, 2006. Historically, we have not made any significant
payments under such indemnifications or guarantees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">PURCHASE AND DEVELOPMENT OF ASSETS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of transactions involving purchases and development of assets, we may be required to
pay counterparties for costs and losses incurred as a result of breaches of representations and
warranties, loss or damages to property, or changes in or in the interpretation of laws and
regulations (including tax legislation).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No amount has been accrued in the consolidated balance sheet relating to this type of
indemnification or guarantee at December&nbsp;31, 2006. Historically, we have not made any significant
payments under such indemnifications or guarantees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">OTHER TRANSACTIONS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of other transactions, such as securitization agreements and operating leases, we may
be required to pay counterparties for costs and losses incurred as a result of breaches of
representations and warranties, loss or damages to property, or changes in or in the interpretation
of laws and regulations (including tax legislation).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No amount has been accrued in the consolidated balance sheet relating to this type of
indemnification or guarantee at December&nbsp;31, 2006. Historically, we have not made any significant
payments under such indemnifications or guarantees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 28: Supplemental Disclosure for Statements of Cash Flows</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash (used in) provided by non-cash operating assets and
liabilities is as follows:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(86</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(52</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(31</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(94</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other long-term assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(52</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(83</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(259</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(675</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other long-term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(7</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(138</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>209</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(43</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total cash (used in) provided by non-cash operating assets and liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(247</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(384</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 105
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Glossary
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>ARPU and ARPS</I>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Average revenue per unit and average revenue per subscriber represent measurements of the average
revenue generated by each unit or subscriber, expressed as a rate per month for the year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Black-Scholes Option Pricing Model</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Black-Scholes option pricing model is the financial model we use to calculate the
weighted-average fair value of a stock option granted using four key assumptions: stock dividend
yield, expected stock volatility, risk-free interest rate and expected life of the stock option.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Book Value Per Share</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is common shareholders&#146; equity divided by the number of common shares outstanding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Capital Intensity</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is capital expenditures divided by operating revenues.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Cash Flow Per Share</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is calculated by dividing cash from operating activities less capital expenditures by the
average number of common shares outstanding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Cash Flow Yield</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is cash from operating activities less capital expenditures, other investing activities,
dividends on preferred shares and dividends paid by subsidiaries to non-controlling interest,
divided by the number of common shares outstanding at the end of the year and multiplied by the
share price at the end of the year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Churn</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Common Dividend Payout Ratio</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dividends paid on common shares divided by net earnings applicable to common shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Common Dividend Yield</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dividends paid on common shares divided by BCE Inc.&#146;s share price at the end of the year multiplied
by the number of common shares outstanding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Cost of Acquisition</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Cost Method</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The investment is recorded at cost. Dividends received or receivable from the investment are
included in our net earnings, with no adjustment to the carrying amount of the investment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Curtailment</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A curtailment is a significant reduction in plan benefits that can result when a defined benefit
pension plan is amended or restructured. Types of curtailments include a reduction in the expected number of years of
future service of active employees or the elimination of the right to earn defined benefits for
some or all of the future service of employees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Digital Equivalent Access Lines</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These are derived by converting low-capacity data lines (DS-3 and lower) to the equivalent number
of voice-grade access lines.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>EBITDA</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We define EBITDA (earnings before interest, taxes, depreciation and amortization) as operating
revenues less operating expenses, meaning it represents operating income before amortization
expense, net benefit plans cost, and restructuring and other items.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>EBITDA Margin</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is EBITDA divided by operating revenues.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>EBITDA to Interest Ratio</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">EBITDA divided by interest expense.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Equity Method</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The investment is initially recorded at cost and adjustments are made to include our share of the
investment&#146;s net earnings or losses. These adjustments are included in our net earnings. The amount
of our investment is reduced by any dividends received or receivable from the investment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Free Cash Flow</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We define free cash flow as cash from operating activities after capital expenditures, total
dividends and other investing activities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Goodwill</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Goodwill may be created when we acquire a business. It is calculated by deducting the fair value of
the net assets acquired from the consideration given and represents the value of factors that
contribute to greater earning power, such as a good reputation, customer loyalty or intellectual
capital.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">106 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Glossary
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Long-Term Debt to Equity</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is long-term debt (including any portion due within one year) divided by shareholders&#146; equity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Market Capitalization</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is BCE Inc.&#146;s share price at the end of the year multiplied by the number of common shares
outstanding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Net Debt to Capitalization Ratio</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is net debt divided by our capitalization (total net debt, non-controlling interest and
shareholders&#146; equity).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Net Debt to EBITDA</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This is net debt divided by EBITDA.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Operating Margin</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Operating income divided by operating revenues.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Price to Book Ratio</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s share price divided by the book value per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Price to Cash Flow Ratio</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s share price at the end of the year divided by the cash flow per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Price to Earnings Ratio</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc.&#146;s share price at the end of the year divided by earnings per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>ROE</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Return on common shareholders&#146; equity is net earnings available to common shares as a percentage of
average common shareholders&#146; equity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Settlement</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A company makes a settlement when it substantially settles all or part of an accrued benefit
obligation. An example is a lump-sum cash payment to employees in exchange for their rights to
receive future benefits.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Total Debt to Total Assets</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Total long-term debt (including debt due within one year) divided by total assets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Translation of Foreign Currencies</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The way we account for a foreign operation depends on whether it is self-sustaining or integrated.
A self-sustaining foreign operation is largely independent of the parent company. An integrated
foreign operation depends on the parent company to finance or run its operations.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 107
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Board of
Directors</div>
<DIV align="left" style="font-size: 10pt; margin-top: 0pt"><I>As at March&nbsp;7, 2007</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Richard J. Currie, O.C.<BR>
<I>Toronto, Ontario<BR>
Chair of the Board,<BR>
BCE Inc. and Bell Canada<BR>
Director since May&nbsp;1995</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Andr&#233; B&#233;rard, O.C.<BR>
<I>Montr&#233;al, Qu&#233;bec<BR>
Corporate Director<BR>
Director since January&nbsp;2003</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ronald A. Brenneman<BR>
<I>Calgary, Alberta<BR>
President and Chief Executive Officer,<BR>
 Petro-Canada<BR>
Director since November&nbsp;2003</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Anthony S. Fell, O.C.<BR>
<I>Toronto, Ontario<BR>
Chairman of the Board,<BR>
RBC Dominion Securities Limited<BR>
Director since January&nbsp;2002</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Donna Soble Kaufman<BR>
<I>Toronto, Ontario<BR>
Corporate Director and Lawyer<BR>
Director since June&nbsp;1998</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Brian M. Levitt<BR>
<I>Montr&#233;al, Qu&#233;bec<BR>
Partner and Co-Chair,<BR>
Osler, Hoskin &#038; Harcourt LLP<BR>
Director since May&nbsp;1998</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Honourable<BR>
Edward C. Lumley, P.C.<BR>
<I>South Lancaster, Ontario<BR>
Vice-Chairman,<BR>
BMO Nesbitt Burns Inc.<BR>
Director since January&nbsp;2003</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Judith Maxwell, C.M.<BR>
<I>Ottawa, Ontario<BR>
Research Fellow, Canadian Policy,<BR>
Research Networks Inc.<BR>
Director since January&nbsp;2000</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">John H. McArthur<BR>
<I>Massachusetts, U.S.A.<BR>
Dean Emeritus, Harvard University,<BR>
Graduate School of<BR>
Business Administration<BR>
Director since May&nbsp;1995</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Thomas C. O&#146;Neill, F.C.A.<BR>
<I>Don Mills, Ontario<BR>
Corporate Director and<BR>
Chartered Accountant<BR>
Director since January&nbsp;2003</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">James A. Pattison, O.C., O.B.C.<BR>
<I>Vancouver, British Columbia<BR>
Chairman and Chief Executive Officer,<BR>
The Jim Pattison Group<BR>
Director since February&nbsp;2005</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Robert C. Pozen<BR>
<I>Massachusetts, U.S.A.<BR>
Chairman of the Board,<BR>
MFS Investment Management<BR>
Director since February&nbsp;2002</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Michael J. Sabia<BR>
<I>Montr&#233;al, Qu&#233;bec<BR>
President and Chief Executive Officer, <BR>
BCE Inc., and<BR>
Chief Executive Officer, Bell Canada<BR>
Director since October&nbsp;2002</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Paul M. Tellier, P.C., C.C., Q.C.<BR>
<I>Montr&#233;al, Qu&#233;bec<BR>
Corporate Director<BR>
Director since April&nbsp;1999</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Victor L. Young, O.C.<BR>
<I>St. John&#146;s, Newfoundland and Labrador<BR>
Corporate Director<BR>
Director since May&nbsp;1995</I>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><DIV style="font-size: 3pt; margin-top: 1pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>COMMITTEES OF THE BOARD</B><BR>
<I>Members of Committees of the Board</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">AUDIT COMMITTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">T.C.
O&#146;Neill <I>(Chair)</I>, A. B&#233;rard, A.S. Fell, J. Maxwell, V.L. Young
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The audit committee assists the board in the oversight of:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the integrity of the financial statements and related information
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> compliance with applicable legal and regulatory requirements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the independence, qualifications and appointment of the external auditor
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the performance of the internal and external auditors
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> management&#146;s responsibility for reporting on internal controls and risk management.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">PENSION FUND COMMITTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">R.C. Pozen
<I>(Chair)</I>, R.A. Brenneman, B.M. Levitt, P.M. Tellier, V.L. Young
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The PFC assists the board in the oversight of:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the administration, funding and investment of our pension plans and fund
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> the unitized pooled fund sponsored by BCE for the collective investment of the fund in
which certain of BCE&#146;s subsidiaries&#146; pension funds invest.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CORPORATE GOVERNANCE COMMITTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">D. Soble Kaufman <I>(Chair)</I>, A. B&#233;rard, E.C. Lumley, J.H. McArthur, J.A. Pattison
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The CGC assists the board in:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> developing and implementing our corporate governance guidelines
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> identifying individuals qualified to become directors
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> determining the composition of the board and its committees
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> determining the directors&#146; remuneration for board and committee service
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> developing and overseeing a process to assess the board chair, the board committees,
chairs of committees and individual directors
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> overseeing our policies concerning business conduct, ethics, public disclosure of
material information and other matters.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">MANAGEMENT RESOURCES AND COMPENSATION COMMITTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">R.J. Currie <I>(Chair)</I>, R.A. Brenneman, A.S. Fell,<BR>
 J.H. McArthur, R.C. Pozen
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The MRCC assists the board in the oversight of the:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> compensation, nomination, evaluation and succession of officers and other management
personnel
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> health and safety policies and practices.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">108 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Executives</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 0pt"><I>As at March&nbsp;7, 2007</I>


</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Michael J. Sabia<BR>
<I>President and Chief Executive Officer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">George A. Cope<BR>
<I>President and Chief Operating Officer,<BR>
Bell Canada</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Michael T. Boychuk<BR>
<I>Senior Vice-President and Treasurer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">St&#233;phane Boisvert<BR>
<I>President &#150; Enterprise, Bell Canada</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kevin W. Crull<BR>
<I>President &#150; Residential Services,<BR>
Bell Canada</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">William J. Fox<BR>
<I>Executive Vice-President &#150;<BR>
Communications and Corporate Development</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Leo Houle<BR>
<I>Chief Talent Officer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Lawson A.W. Hunter<BR>
<I>Executive Vice-President and<BR>
Chief Corporate Officer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Patricia A. Olah<BR>
<I>Corporate Secretary</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Wade Oosterman<BR>
<I>President &#150; Bell Mobility and<BR>
Bell Distribution Inc.,<BR>
Chief Brand Officer, Bell Canada</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Patrick Pichette<BR>
<I>President &#150; Operations, Bell Canada</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Eugene Roman<BR>
<I>Group President &#150; Systems and<BR>
Technology, Bell Canada</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Karen H. Sheriff<BR>
<I>President &#150; Small and Medium <BR>
Business, Bell Canada</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Scott L. Thomson<BR>
<I>Executive Vice-President &#150;<BR>
Corporate Development and Planning</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Martine Turcotte<BR>
<I>Chief Legal Officer</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Siim A. Vanaselja<BR>
<I>Chief Financial Officer</I>

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Bell Canada Enterprises &nbsp;&nbsp;<I>2006 Annual Report </I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 109
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 12pt">Tax Information
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DIVIDENDS AND CAPITAL GAINS ON YOUR SHARES

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Shareholders are required to pay tax on dividends as well as any capital gains they realize
when they sell their shares or are deemed to have sold them. If you received Nortel Networks common
shares in May&nbsp;2000 and/or Bell Aliant Regional Communications Income Fund Units, you should contact
the Investor Relations group to learn more on the tax implications impact on your cost or visit
<I>www.bce.ca</I>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since January&nbsp;1, 2006 and unless stated otherwise, dividends paid by BCE and Bell Canada to
Canadian residents are eligible dividends as per the Canadian <I>Income Tax Act</I>. Since March&nbsp;24, 2006
and unless stated otherwise, dividends paid by BCE and Bell Canada to Qu&#233;bec residents are eligible
dividends as per the proposed changes announced during the March&nbsp;23, 2006 provincial Budget speech.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">FOREIGN INVESTORS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dividends paid or credited to non-residents of Canada are subject to a 25% withholding tax
unless reduced by treaty. Under current tax treaties, U.S. and U.K. residents are subject to a 15%
withholding tax.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">U.S. INVESTORS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are required to solicit taxpayer identification numbers (TIN)&nbsp;and Internal Revenue Service
(IRS)&nbsp;Form&nbsp;W-9 certifications of residency from certain U.S. investors. Where these have not been
received, we may be required to deduct the IRS&#146; specified backup withholding tax.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information, please contact our Investor Relations or the transfer agent,
Computershare Trust Company of Canada.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">NORMAL COURSE ISSUER BID
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;6, 2007, we received acceptance from the Toronto Stock Exchange (TSX)&nbsp;of our Notice
of Intention to Make a Normal Course Issuer Bid. The filing of this notice allows us to purchase
for cancellation up to 40,000,000 of our common shares, representing approximately 5% of the
807,658,658 common shares outstanding as at January&nbsp;31, 2007. We are contemplating a buyback
program of approximately $1.2&nbsp;billion. Purchases of the shares will be made at the discretion of
BCE Inc.&#146;s management on the open market through the facilities of the TSX and/or the New York
Stock Exchange (NYSE)&nbsp;in accordance with the by-laws and rules of such exchanges. Purchases of
common shares may be made from time to time, at market prices, during the period starting February
9, 2007 and ending no later than February&nbsp;8, 2008. You can obtain a copy of the Notice of Intention
on request without charge from our Investor Relations Group.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">110 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bell Canada Enterprises&nbsp;&nbsp; <I>2006 Annual Report</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Shareholder Information
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2007 SHAREHOLDER MEETING

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The shareholder meeting will take place at 9:30 a.m. (Eastern time), Wednesday, June&nbsp;6, 2007,
at Le Centre Mont-Royal, 2200 Mansfield Street, Montr&#233;al, Qu&#233;bec, in the auditorium Le Grand Salon.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The meeting will also be webcast live on our website, <I>www.bce.ca</I>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We offer various ways to vote your shares. For more details, consult our proxy circular or
visit our website.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">2007 QUARTERLY EARNINGS RELEASE DATES
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="82%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">First quarter
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">May&nbsp;2, 2007</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Second quarter
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">August&nbsp;1, 2007</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Third quarter
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">November&nbsp;7, 2007</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Fourth quarter
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><FONT style="white-space: nowrap">February&nbsp;6, 2008</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Quarterly and annual reports as well as other corporate documents can be found on our website. If
you wish to be notified electronically when documents are posted, register online at <I>www.bce.ca </I>for
our service &#145;Email Alerts&#146;. Corporate documents can also be requested from the Investor Relations
group.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SHARE FACTS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Symbol</I><BR>
BCE

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Listings</I>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">TSX, NYSE, and the Zurich (SWX)&nbsp;stock exchange
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You will find a summary of the differences between our governance practices and the NYSE
corporate governance rules in the governance section of our website at <I>www.bce.ca</I>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Common Shares Outstanding</I><BR>
807,643,941 as at December&nbsp;31, 2006

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Stock Splits</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Three-for-one on April&nbsp;26, 1979 and two-for-one on May&nbsp;15, 1997
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Quarterly Dividend*</I><BR>
$0.365 per common share

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>2007 Dividend Schedule*</I>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>Record Date</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Payment Date</I></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">March&nbsp;15, 2007
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">April&nbsp;15, 2007</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">June&nbsp;15, 2007
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;15, 2007</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">September&nbsp;14, 2007
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>October&nbsp;15, 2007</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">December&nbsp;14, 2007
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;15, 2008</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%;  border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt"><I>* Subject to approval by the board of directors</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SHAREHOLDER SERVICES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Dividend Reinvestment and Stock Purchase Plan</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This plan provides a convenient method for eligible holders of common shares to reinvest their
dividends and make optional cash contributions to purchase additional common shares without
brokerage costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Dividend Direct Deposit Service</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Avoid postal delays and trips to the bank by joining the dividend direct deposit service.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>E-Delivery Service</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Enrol in our e-delivery service to receive the proxy material, the annual report and/or quarterly
documents by e-mail. By doing so, you will receive your documents faster and in an environmentally
friendly manner while helping your company reduce printing and postage costs.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Manage your Shareholder Account</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Enrol in Investor Centre on <I>www.computershare.com </I>and benefit from a wide variety of self-service
tools to help track and manage your shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Duplicate Mailings</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Help us control costs and eliminate duplicate mailings by consolidating your accounts.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For more details on any of these services, registered shareholders (shares are registered
under your name) must contact the transfer agent. Non-registered shareholders must contact their
brokers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CONTACT INFORMATION
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Transfer Agent and Registrar</I>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For information on shareholder services or any other inquiries regarding your account (including
stock transfer, address change, lost certificates and tax forms), contact:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Computershare Trust Company of Canada<BR>
9th Floor, 100 University Avenue<BR>
Toronto, Ontario M5J 2Y1

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>e-mail</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">bce@computershare.com</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>tel</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">514 982-7555 or 1 800 561-0934</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>(toll free in Canada and the U.S.)</I></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>fax</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">416 263-9394 or 1 888 453-0330</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>(toll free in Canada and the U.S.) or visit their
website at www.computershare.com</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Investor Relations
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1000 de La Gaucheti&#232;re Street West, Suite&nbsp;3700, Montr&#233;al, Qu&#233;bec H3B 4Y7
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>e-mail</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">investor.relations@bce.ca</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>tel</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1 800 339-6353</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>fax</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">514 786-3970</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>or visit the Investors section on our website at www.bce.ca</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><DIV style="font-size: 3pt; margin-top: 1pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Trademarks: The following is a list of all our trademarks referred to and used as such in this
annual report. Fuel, 10-4 and Sympatico are trademarks of Bell Canada; Mobile Browser is a
trademark of Bell Mobility Inc.; Nimiq and Anik are trademarks of Telesat Canada; SmartTouch is a
trademark of Stentor Resource Centre Inc.; Solo is a trademark of Solo Branding Inc. Any other
trademarks, or corporate, trade or domain names used in this report are the property of their
owners. We believe that our trademarks and domain names are very important to our success. Our
exclusive trademark rights are perpetual provided that their registrations are timely renewed and
that the trademarks are used in commerce by us or our licensees. We take appropriate measures to
protect, renew and defend our trademarks. We also spend considerable time and resources overseeing, registering, renewing, licensing and protecting our
trademarks and domain names and prosecuting those who infringe on them. We take great care not to
infringe on the intellectual property and trademarks of others.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Cette publication est disponible en fran&#231;ais. BCE&#146;s Annual Report is printed with vegetable-based
ink and is recyclable.</I>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><I>Printed in Canada</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>





<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="m35148orm3514800.gif" alt="(BELL CANADA ENTERPRISES LOGO)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>BCE&#146;s website has extensive information about the company&#146;s governance practices, community
investment, and corporate responsibility.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The </I>Bell 2007 Business Update <I>is available at www.bce.ca/businessupdate.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BCE Inc. 1000 de La Gaucheti&#232;re Street West, Suite&nbsp;3700, Montr&#233;al, Qu&#233;bec H3B 4Y7 www.bce.ca
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Communications &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <I>e-mail </I>bcecomms@bce.ca&nbsp;&nbsp; <I>tel </I>1 888 932-6666 &nbsp;&nbsp;<I>fax </I>514 870-4385
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Investor Relations &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <I>e-mail </I>investor.relations@bce.ca &nbsp;&nbsp;<I>tel </I>1 800 339-6353 &nbsp;&nbsp;<I>fax </I>514 786-3970
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>m35148orexv99w2.htm
<DESCRIPTION>CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;99.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We consent to the use of our reports dated March&nbsp;7, 2007 relating to the financial statements of
BCE Inc., to the reconciliation of Canadian GAAP to United States GAAP and to management&#146;s report
on internal control over financial reporting appearing in this Annual Report on Form 40-F of BCE
Inc. for the year ended December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We also consent to the incorporation by reference in Registration Statements No.&nbsp;333-12130 on Form
F-3 and No.&nbsp;333-12780, 333-12802 and 333-12804 on Form S-8 of our reports dated March&nbsp;7, 2007
relating to the financial statements of BCE Inc., to the reconciliation of Canadian GAAP to United
States GAAP and to management&#146;s report on internal control over financial reporting appearing in
this Annual Report on Form 40-F of BCE Inc. for the year ended December&nbsp;31, 2006.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">(signed)      Deloitte &#038; Touche LLP
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Deloitte &#038; Touche LLP     &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Independent Registered Chartered Accountants&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Montreal, Canada<BR>
March&nbsp;14, 2007

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
<FILENAME>m35148orexv99w3.htm
<DESCRIPTION>RECONCILIATION OF CANADIAN GAAP
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;99.3</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECONCILIATION OF CANADIAN GAAP TO UNITED STATES GAAP</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following tables are a reconciliation of significant differences relating to the statement of
operations and total shareholders&#146; equity reported according to Canadian GAAP and United States
GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">RECONCILIATION OF NET EARNINGS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Canadian GAAP &#151; Earnings from continuing operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,891</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,395</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustments:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deferred costs <SUP style="font-size: 85%; vertical-align: text-top">(a)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net benefit plans <SUP style="font-size: 85%; vertical-align: text-top">(b)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(11</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(65</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(75</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Equity income <SUP style="font-size: 85%; vertical-align: text-top">(c)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gain on sale of CGI <SUP style="font-size: 85%; vertical-align: text-top">(c)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>59</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">(Losses) gains on investments and derivative instruments <SUP style="font-size: 85%; vertical-align: text-top">(d) (f) </SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gain on the distribution of Bell Aliant Income Fund units <SUP style="font-size: 85%; vertical-align: text-top">(j)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,540</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capitalized interest <SUP style="font-size: 85%; vertical-align: text-top">(l)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>43</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>United States GAAP &#151; Earnings from continuing operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,527</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,392</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discontinued operations &#151; United States GAAP <SUP style="font-size: 85%; vertical-align: text-top">(c)</SUP> <SUP style="font-size: 85%; vertical-align: text-top">(e)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>55</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">159</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>United States GAAP &#151; Net earnings before extraordinary gain</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,582</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,551</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Extraordinary gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>United States GAAP &#151; Net earnings</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,582</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,620</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Dividends on preferred shares <SUP style="font-size: 85%; vertical-align: text-top">(d)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(85</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(85</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(85</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>United States GAAP &#151; Net earnings applicable to common shares</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,497</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,535</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other comprehensive earnings items</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Change in currency translation adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>71</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Change in unrealized (loss)&nbsp;gain on investments and derivative instruments <SUP style="font-size: 85%; vertical-align: text-top">(d) (f) </SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(20</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Additional minimum liability for pension obligations <SUP style="font-size: 85%; vertical-align: text-top">(b)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,106</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,093</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(66</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discontinued operations &#151; Additional minimum liability for pension obligations <SUP style="font-size: 85%; vertical-align: text-top">(b)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>26</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(19</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Comprehensive earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,680</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,441</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings per common share &#151; basic</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4.00</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.06</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Extraordinary gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4.06</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net earnings per common share &#151; diluted</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4.00</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>0.06</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Extraordinary gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4.06</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Dividends per common share</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1.32</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average number of common shares outstanding (millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>861.4</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">924.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Statements of Accumulated Other Comprehensive Loss</B>
</DIV>

<DIV align="center">
</DIV>
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Currency translation adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(73</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrealized gain on investments and derivative instruments <SUP style="font-size: 85%; vertical-align: text-top">(d) (f) </SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="9"><DIV style="margin-left:15px; text-indent:-15px">Net benefit plans <SUP style="font-size: 85%; vertical-align: text-top">(b)</SUP></DIV>
</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Additional minimum liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,279</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net actuarial losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,355</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net past service costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(62</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net transitional obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(95</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discontinued Operations &#151; Additional minimum liability for pension obligations <SUP style="font-size: 85%; vertical-align: text-top">(b)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(26</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Accumulated other comprehensive loss</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,509</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,353</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Reconciliation of Total Shareholders&#146; Equity</B>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Canadian GAAP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,367</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,721</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD colspan="9"><DIV style="margin-left:15px; text-indent:-15px">Adjustments</DIV></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deferred costs<SUP style="font-size: 85%; vertical-align: text-top"> (a)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(31</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(35</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">

<TD colspan="9"><DIV style="margin-left:30px; text-indent:-15px">Net
benefit plans
<SUP style="font-size: 85%; vertical-align: text-top">(b)</SUP></DIV></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Additional minimum liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,279</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>75</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net actuarial losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,594</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(223</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net past service costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(62</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net transitional obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(95</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Goodwill <SUP style="font-size: 85%; vertical-align: text-top">(g)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>68</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discontinued operations <SUP style="font-size: 85%; vertical-align: text-top">(e)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Unrealized gain on investments and derivative instruments <SUP style="font-size: 85%; vertical-align: text-top">(d) (f) </SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>32</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capitalized Interest <SUP style="font-size: 85%; vertical-align: text-top">(l)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>371</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>United States GAAP</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,134</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,359</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DESCRIPTION OF UNITED STATES GAAP ADJUSTMENTS

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(a)&nbsp;&nbsp;&nbsp;Deferred Costs
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under Canadian GAAP, certain expenses, such as development and pre-operating expenses, can be
deferred and amortized if they meet certain criteria. Under United States GAAP, these costs are
expensed as incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(b)&nbsp;&nbsp;&nbsp;Net Benefit Plans
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our accounting for future benefits for employees under Canadian GAAP and United States GAAP is
essentially the same, except for the recognition of certain unrealized gains and losses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Canadian GAAP requires companies to recognize a pension valuation allowance for any excess of the
accrued benefit asset over the expected future benefit. Changes in the pension valuation allowance
are recognized in the consolidated statement of operations. United States GAAP does not
specifically address pension valuation allowances. United States regulators have interpreted this
to be a difference between Canadian and United States GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under United States GAAP, an additional minimum liability is recorded for the excess of the
unfunded accumulated benefit obligation over the recorded pension benefit liability. An offsetting
intangible asset equal to the unrecognized prior service costs is recorded. Any difference is
recorded as a reduction in accumulated other comprehensive income.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Effective December&nbsp;31, 2006, we adopted the recognition requirements of Statement of Financial
Accounting Standards (SFAS)&nbsp;No.&nbsp;158, <I>Employers&#146; Accounting for Defined Benefit Pension and Other
Postretirement Plans</I>, on a prospective basis. This new standard requires us to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>recognize the funded status of each benefit plan in the balance sheet by aggregating
the status of all overfunded plans and recognizing that amount as an asset and aggregating
the status of all underfunded plans and recognizing that amount as a liability.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>recognize as a component of other comprehensive income, net of tax, the actuarial gains
or losses and past service costs or credits that arise during the period and are not
recognized as components of net benefit plans cost.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>recognize corresponding adjustments in other comprehensive earnings when the actuarial
gains or losses, prior service costs or credits, and transitional assets or obligations
remaining are subsequently recognized as components of net benefit plans cost.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At December&nbsp;31, 2006, the balance sheet, including additional minimum liability, was adjusted such
that actuarial gains or losses, prior service costs or credits, and transitional assets or
obligations that have not yet been included in net benefit plans cost at December&nbsp;31, 2006 were
recognized as components of accumulated other comprehensive loss, net of tax. The adjustment at
December&nbsp;31, 2006 resulted in an increase of $1,339&nbsp;million in accumulated other comprehensive
loss.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2006, the total adjustment to the balance sheet relating to employee future benefits resulted in:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a decrease of $1,086&nbsp;million in accrued benefit asset</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an increase of $551&nbsp;million in future income tax asset</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an increase of $1,868&nbsp;million in accrued benefit liability</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a decrease of $339&nbsp;million in future income tax liability</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a decrease of $388&nbsp;million in non-controlling interest</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an increase of $1,512&nbsp;million in accumulated other comprehensive loss</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a decrease of $164&nbsp;million in retained earnings.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(c)&nbsp;&nbsp;Equity Income
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under Canadian GAAP, we account for our joint venture investments using the proportionate
consolidation method. Under United States GAAP, we account for our joint venture investments using
the equity method. There is no impact on net earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2005, we reclassified the results of our interest in CGI as a discontinued operation under
Canadian GAAP. Under United States GAAP, we must continue to account for our investment in CGI
using the equity method until its disposal. An adjustment is made to reclassify the results of CGI
from discontinued operations to continuing operations as equity income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;12, 2006, CGI bought 100&nbsp;million of its Class&nbsp;A shares from us and we realized total net
proceeds of $849&nbsp;million. The gain on disposition was $79&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On April&nbsp;6, 2006, we exercised our CGI warrants to acquire Class&nbsp;A shares at a cost of $21&nbsp;million.
In addition, we recorded a loss of $17&nbsp;million in the second quarter of 2006, which represented a
write-down of our remaining investment in CGI, which was available for sale, to fair market value
based on its stock price at June&nbsp;30, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, in 2006, we recorded a further loss of $1&nbsp;million, which represented a write-down of
our investment in CGI, as a result of the Bell Canada pension fund&#146;s acquisition of 31.4&nbsp;million of
our CGI shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(d)&nbsp;&nbsp;&nbsp;Accounting for Derivative Instruments and Hedging Activities
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under United States GAAP, all derivatives must be recorded on the balance sheet at fair value. The
effective portion of the change in the unrealized gain (loss)&nbsp;on derivative instruments that
qualify for cash flow hedge accounting is reported in comprehensive earnings. In addition, any
ineffectiveness measured on derivative instruments that qualify
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">for hedge accounting is reported in net earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We elected to settle the dividend rate swaps used to hedge $510&nbsp;million of BCE Inc. Series&nbsp;AA
preferred shares and $510&nbsp;million of BCE Inc. Series&nbsp;AC preferred shares in the third quarter of
2003. These dividend rate swaps in effect converted the fixed-rate dividends on these preferred
shares to floating-rate dividends. They were to mature in 2007. As a result of the early
settlement, we received total proceeds of $83&nbsp;million in cash. Under Canadian GAAP, the proceeds
are being deferred and amortized against the dividends on these preferred shares over the
remaining original terms of the swaps. Under United States GAAP, these dividend rate swaps did not
qualify for hedge accounting and were recorded on the balance sheet at fair value. As a result,
the amortization of the deferred gain under Canadian GAAP is reversed for purposes of United
States GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(e)&nbsp;&nbsp;&nbsp;Discontinued Operations
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Differences between Canadian GAAP and United States GAAP will cause the carrying values of the net
assets of discontinued operations to be different.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(f)&nbsp;&nbsp;&nbsp;Investments
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our portfolio investments are recorded at cost under Canadian GAAP. Investments acquired
principally for the purpose of sale or repurchase in the near term would be classified under United
States GAAP as held for trading and would be carried at fair value, with any gains or losses
included in earnings. Investments not classified as held for trading or held to maturity would be
classified as available-for-sale under United States GAAP and would be carried at fair value, with
any unrealized gains or losses included in other comprehensive earnings, net of tax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(g)&nbsp;&nbsp;&nbsp;Goodwill
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under Canadian GAAP, certain business combinations recorded in prior years have been accounted for
at the carrying value of the underlying assets and liabilities exchanged, whereas under United
States GAAP such transactions were recorded on a fair value basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(h)&nbsp;&nbsp;&nbsp;Accounting for Stock-Based Compensation
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We adopted the fair value-based method of accounting for stock-based compensation on a prospective
basis, effective January&nbsp;1, 2002. Under Statement of Financial Accounting Standards (SFAS)&nbsp;No.&nbsp;123,
we are required to make pro forma disclosures of net earnings, and basic and diluted earnings per
share, assuming that the fair value-based method of accounting had been applied from the date that
SFAS No.&nbsp;123 was adopted. We also adopted Statement of Financial Accounting Standards &#151; Revised
(SFAS)&nbsp;No.&nbsp;123(R) which had no impact.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows compensation expense for stock options and pro forma net earnings
using the Black-Scholes option pricing model.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,574</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,620</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Compensation cost included in net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total compensation cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(8</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,574</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,604</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net earnings per common share (basic)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net earnings per common share (diluted)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(i)&nbsp;&nbsp;&nbsp;Presentation and Disclosure of Guarantees
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under Canadian GAAP, guarantees do not include indemnifications against intellectual property right
infringement, whereas under United States GAAP they are included. At December&nbsp;31, 2006, such
indemnifications amounted to $1.2&nbsp;billion, of which $100&nbsp;million expires in 2007, $26&nbsp;million in
2008, $26&nbsp;million in 2009, $8&nbsp;million in 2010, $165&nbsp;million in 2011 and after and $913&nbsp;million with
an indefinite term. We also have guarantees where no maximum potential amount is specified.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(j)&nbsp;&nbsp;&nbsp;Bell Aliant
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;7, 2006, BCE Inc. and Aliant Inc. (Aliant) announced their intention to form a new
regional telecommunications service provider in the form of an income trust. On July&nbsp;7, 2006 the
Plan of Arrangement forming Bell Aliant was completed. Bell Aliant combines Bell Canada&#146;s former
regional wireline operations in rural Ontario and Quebec with Aliant&#146;s former wireline operations
and includes Bell Canada&#146;s former 63.4% interest in NorthernTel Limited Partnership (NorthernTel)
and T&#233;l&#233;bec Limited Partnership (T&#233;l&#233;bec), the operating partnerships of the Bell Nordiq Income
Fund, held through Bell Nordiq Group Inc. (Bell Nordiq), an indirect wholly-owned subsidiary of
Bell Canada.<BR>
BCE&#146;s ownership of Bell Aliant has been reduced to 44.7% through a distribution of trust units by
way of a return of capital to holders of BCE Inc. common shares on July&nbsp;10, 2006. This
distribution resulted in an increase in contributed surplus of $1,547&nbsp;million for Canadian GAAP as
the transaction is deemed to have occurred at carrying value. For US GAAP purposes, the
distribution of trust units is deemed to have occurred at fair market value, with any gain or loss
recognized in earnings. Therefore, the increase in contributed surplus, adjusted for previously
existing US and Canadian GAAP differences, has been recorded as a gain on distribution of trust
units in earnings from continuing operations for US GAAP purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(k)&nbsp;&nbsp;&nbsp;Stock issuance costs
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under United States GAAP, stock issue expenses are charged to common stock, whereas under Canadian
GAAP they may be charged to Retained Earnings or common stock. For Canadian GAAP purposes, we
charge stock issue expenses to Retained Earnings. As at December&nbsp;31, 2006, a cumulative amount of
$65&nbsp;million of stock issue expenses have been recorded against Retained Earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(l)&nbsp;&nbsp;&nbsp;Comparative Periods
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In September&nbsp;2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No.&nbsp;108,
<I>Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year
Financial Statements </I>(SAB 108), to address the observed diversity in quantification practices of
unadjusted differences with respect to annual financial statements. SAB 108 requires that
misstatements in the current year financial statements be quantified using both a balance sheet and
an income statement approach and evaluated as to whether either approach results in quantifying a
misstatement that, when all relevant quantitative and qualitative factors are considered, is
material. SAB 108 is effective for fiscal years ending after November&nbsp;15, 2006 and on initial
application, permits a one-time cumulative effect adjustment to beginning retained earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Effective December&nbsp;31, 2006 we adopted SAB 108 and increased our opening retained earnings as at
January&nbsp;1, 2006 as reported under United States GAAP by $328&nbsp;million relating to the capitalization
of borrowing costs. Under Canadian GAAP, we capitalize borrowing costs for significant assets
under construction, whereas under United States GAAP borrowing costs must be attributed to all
assets under construction and capitalized accordingly.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We also made corrections to prior periods related mainly to embedded derivatives and
available-for-sale investments. We recorded gains on embedded derivatives that were previously not
included in United States GAAP net earnings. We also reversed unrealized gains on
available-for-sale investments in non-public companies previously recorded in other comprehensive
income. As a result of the above, we have reduced other comprehensive income by $110&nbsp;million for
2005, accumulated other comprehensive loss by $110&nbsp;million at December&nbsp;31, 2005 and we decreased
shareholders&#146; equity by $84&nbsp;million at December&nbsp;31, 2005. We also increased United States GAAP net
earnings by $1&nbsp;million for 2005 and $13&nbsp;million for 2004 and opening retained earnings of $12
million in 2004.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>5
<FILENAME>m35148orexv99w4.htm
<DESCRIPTION>REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w4</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;99.4</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS ON<BR>
RECONCILIATION OF CANADIAN GAAP TO UNITED STATES GAAP</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors and Shareholders of BCE Inc.

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have audited the consolidated financial statements of BCE Inc. and subsidiaries (the &#147;Company&#148;)
as of December&nbsp;31, 2006 and 2005 and for each of the three years in the period ended December&nbsp;31,
2006, management&#146;s assessment of the effectiveness of the Company&#146;s internal control over financial
reporting as of December&nbsp;31, 2006, and the effectiveness of the Company&#146;s internal control over
financial reporting as of December&nbsp;31, 2006, and have issued our reports thereon dated March&nbsp;7,
2007; such consolidated financial statements and reports are included in the 2006 Annual Report to
Shareholders listed in Exhibit&nbsp;99.1 on Form 40-F. Our audits also included the reconciliation from
Canadian GAAP to United States GAAP of the Company listed in Exhibit&nbsp;99.3 on Form 40-F. This
reconciliation from Canadian GAAP to United States GAAP is the responsibility of the Company&#146;s
management. Our responsibility is to express an opinion based on our audits. In our opinion, such
reconciliation from Canadian GAAP to United States GAAP, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all material respects, the
information set forth therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As disclosed in notes (b)&nbsp;and (l)&nbsp;to the reconciliation from Canadian GAAP to United States GAAP,
the Company changed its methods of accounting for post-employment benefits and for quantifying
errors.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">(signed)      Deloitte &#038; Touche LLP
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Deloitte &#038; Touche LLP     &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Independent Registered Chartered Accountants&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Montreal, Canada<BR>
March&nbsp;7, 2007

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.31
<SEQUENCE>6
<FILENAME>m35148orexv99w31.htm
<DESCRIPTION>CERTIFICATIONS OF THE CEO AND THE CFO
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w31</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;99.31</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Michael J. Sabia, President and Chief Executive Officer of BCE Inc., certify that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this annual report on Form 40-F of BCE Inc.;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the issuer as of, and for, the periods presented in this report;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuer&#146;s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the issuer and have:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the issuer, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the issuer&#146;s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report any change in the issuer&#146;s internal control over financial
reporting that occurred during the period covered by the annual report that has materially
affected, or is reasonably likely to materially affect, the issuer&#146;s internal control over
financial reporting; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuer&#146;s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the issuer&#146;s auditors and the
audit committee of the issuer&#146;s board of directors (or persons performing the equivalent
functions):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the issuer&#146;s ability to record, process, summarize and report financial information; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material, that involves management or other employees who
have a significant role in the issuer&#146;s internal control over financial reporting.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">March&nbsp;14, 2007

</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">(signed) Michael J. Sabia
&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="2" align="left">Michael J. Sabia&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="2" align="left">President and Chief Executive
Officer<BR>
BCE Inc.&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;99.31</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Siim A. Vanaselja, Chief Financial Officer of BCE Inc., certify that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this annual report on Form 40-F of BCE Inc.;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the issuer as of, and for, the periods presented in this report;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuer&#146;s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the issuer and have:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the issuer, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the issuer&#146;s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report any change in the issuer&#146;s internal control over financial
reporting that occurred during the period covered by the annual report that has materially
affected, or is reasonably likely to materially affect, the issuer&#146;s internal control over
financial reporting; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuer&#146;s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the issuer&#146;s auditors and the
audit committee of the issuer&#146;s board of directors (or persons performing the equivalent
functions):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the issuer&#146;s ability to record, process, summarize and report financial information; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material, that involves management or other employees who
have a significant role in the issuer&#146;s internal control over financial reporting.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">March&nbsp;14, 2007

</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">(signed) Siim A. Vanaselja
&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="2" align="left">Siim A. Vanaselja&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="2" align="left">Chief Financial Officer<BR>
BCE Inc.&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.32
<SEQUENCE>7
<FILENAME>m35148orexv99w32.htm
<DESCRIPTION>CERTIFICATIONS OF THE CEO AND THE CFO
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w32</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;99.32</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT<BR>
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley
Act of 2002, each of the undersigned officers of BCE Inc. (the &#147;Company&#148;), does hereby certify
that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The annual report on Form 40-F for the year ended December&nbsp;31, 2006 of the Company fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
the information contained in the Form 40-F fairly presents, in all material respects, the financial
condition and results of operations of the Company.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">(signed) Michael J. Sabia
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Michael J. Sabia&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Dated: March 14, 2007&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President and Chief Executive
Officer<BR>
BCE Inc.&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">(signed) Siim A. Vanaselja
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Siim A. Vanaselja&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Dated: March 14, 2007&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Financial Officer<BR>
BCE Inc.&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
