Supplementary Financial Information - BCE First Quarter 2008

EX-3 4 supp_finan.htm SUPPLEMENTARY FINANCIAL INFORMATION Q1 2008 Supplementary Financial Information - BCE First Quarter 2008

EXHIBIT 3

BCE Inc. ⁽¹⁾
Consolidated Operational Data

		Q1			Q1
($ millions, except per share amounts) (unaudited)		2008			2007			$ change		% change

Operating revenues		4,391			4,385			6		0.1	%
Cost of revenue, exclusive of depreciation and amortization		(1,071	)		(991	)		(80	)	(8.1	%)
Selling, general and administrative expenses ^(A)		(1,499	)		(1,549	)		50		3.2	%
Net benefit plans cost		(71	)		(102	)		31		30.4	%
EBITDA ⁽³⁾		1,750			1,743			7		0.4	%
EBITDA margin ⁽⁴⁾		*39.9*	%		39.7	%				0.2	pts
Depreciation		(624	)		(632	)		8		1.3	%
Amortization of intangible assets		(196	)		(154	)		(42	)	(27.3	%)
Restructuring and other		(283	)		(36	)		(247	)	n.m.
Operating income		647			921			(274	)	(29.8	%)
Other income		22			131			(109	)	(83.2	%)
Interest expense		(198	)		(215	)		17		7.9	%
Pre-tax earnings from continuing operations		471			837			(366	)	(43.7	%)
Income taxes		(109	)		(213	)		104		48.8	%
Non-controlling interest		(73	)		(95	)		22		23.2	%
Net earnings		289			529			(240	)	(45.4	%)
Dividends on preferred shares		(31	)		(30	)		(1	)	(3.3	%)
Net earnings applicable to common shares		258			499			(241	)	(48.3	%)
Net earnings per common share - basic
Continuing operations	$	0.32		$	0.62		$	(0.30	)	(48.4	%)
Net earnings	$	0.32		$	0.62		$	(0.30	)	(48.4	%)
Net earnings per common share - diluted
Continuing operations	$	0.32		$	0.62		$	(0.30	)	(48.4	%)
Net earnings	$	0.32		$	0.62		$	(0.30	)	(48.4	%)
Dividends per common share	$	0.365		$	0.365		$	-		0.0	%
Average number of common shares outstanding - basic (millions)		805.3			806.0
Average number of common shares outstanding - diluted (millions)		807.1			806.6

The following items are included in net earnings:
Net (losses) gains on investments
Continuing operations		(2	)		103			(105	)	n.m.
Discontinued operations		-			1			(1	)	n.m.
Restructuring and other		(197	)		(25	)		(172	)	n.m.
Total		(199	)		79			(278	)	n.m.
Impact on net earnings per share	$	(0.25	)	$	0.10		$	(0.35	)	n.m.
EPS before restructuring and other and net gains on investments ⁽³⁾	$	0.57		$	0.52		$	0.05		9.6	%

^(A)	Excludes net benefit plans cost

n.m. : not meaningful

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

BCE Inc.
Consolidated Operational Data - Historical Trend

					Total
($ millions, except per share amounts) (unaudited)		Q1 08			2007			Q4 07			Q3 07			Q2 07			Q1 07

Operating revenues		4,391			17,865			4,548			4,494			4,438			4,385
Cost of revenue, exclusive of depreciation and amortization		(1,071	)		(4,169	)		(1,170	)		(1,008	)		(1,000	)		(991	)
Selling, general and administrative expenses ^(A)		(1,499	)		(6,298	)		(1,591	)		(1,598	)		(1,560	)		(1,549	)
Net benefit plans cost		(71	)		(410	)		(113	)		(97	)		(98	)		(102	)
EBITDA		1,750			6,988			1,674			1,791			1,780			1,743
*EBITDA margin*		*39.9*	%		39.1	%		36.8	%		39.9	%		40.1	%		39.7	%
Depreciation		(624	)		(2,549	)		(617	)		(649	)		(651	)		(632	)
Amortization of intangible assets		(196	)		(648	)		(173	)		(165	)		(156	)		(154	)
Restructuring and other		(283	)		(332	)		(146	)		(78	)		(72	)		(36	)
Operating income		647			3,459			738			899			901			921
Other income (expense)		22			2,404			2,296			(4	)		(19	)		131
Interest expense		(198	)		(859	)		(211	)		(213	)		(220	)		(215	)
Pre-tax earnings from continuing operations		471			5,004			2,823			682			662			837
Income taxes		(109	)		(731	)		(354	)		(154	)		(10	)		(213	)
Non-controlling interest		(73	)		(332	)		(65	)		(84	)		(88	)		(95	)
Earnings from continuing operations		289			3,941			2,404			444			564			529
Discontinued operations		-			116			(16	)		(4	)		136			-
Net earnings		289			4,057			2,388			440			700			529
Dividends on preferred shares		(31	)		(131	)		(34	)		(34	)		(33	)		(30	)
Net earnings applicable to common shares		258			3,926			2,354			406			667			499
Net earnings per common share - basic
Continuing operations	$	0.32		$	4.74		$	2.95		$	0.51		$	0.66		$	0.62
Discontinued operations	$	-		$	0.14		$	(0.02	)	$	(0.01	)	$	0.17		$	-
Net earnings	$	0.32		$	4.88		$	2.93		$	0.50		$	0.83		$	0.62
Net earnings per common share - diluted
Continuing operations	$	0.32		$	4.73		$	2.94		$	0.51		$	0.66		$	0.62
Discontinued operations	$	-		$	0.14		$	(0.02	)	$	(0.01	)	$	0.17		$	-
Net earnings	$	0.32		$	4.87		$	2.92		$	0.50		$	0.83		$	0.62
Dividends per common share	$	0.365		$	1,460		$	0.365		$	0.365		$	0.365		$	0.365
Average number of common shares outstanding - basic (millions)		805.3			804.8			805.2			804.9			803.2			806.0
Average number of common shares outstanding - diluted (millions)		807.1			806.9			808.0			807.8			805.5			806.6

The following items are included in net earnings:
Net (losses) gains on investments
Continuing operations		(2	)		2,125			1,883			7			132			103
Discontinued operations		-			124			(13	)		-			136			1
Restructuring and other		(197	)		(207	)		(93	)		(43	)		(46	)		(25	)
Total		(199	)		2,042			1,777			(36	)		222			79
Impact on net earnings per share	$	(0.25	)	$	2.54		$	2.21		$	(0.04	)	$	0.27		$	0.10
EPS before restructuring and other and net gains on investments	$	0.57		$	2.34		$	0.72		$	0.54		$	0.56		$	0.52

^(A)	Excludes net benefit plans cost

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

BCE Inc.
Segmented Data ⁽²⁾

	Q1		Q1
($ millions, except where otherwise indicated) (unaudited)	2008		2007		$ change		% change

Revenues

Bell Wireline	2,639		2,636		3		0.1	%
Bell Wireless	1,041		958		83		8.7	%
Inter-segment eliminations	(17	)	(15	)	(2	)	(13.3	%)
Total Bell	3,663		3,579		84		2.3	%
Bell Aliant	865		851		14		1.6	%
Telesat	-		122		(122	)	n.m.
Inter-segment eliminations	(137	)	(167	)	30		18.0	%
Total BCE Inc.	4,391		4,385		6		0.1	%

EBITDA

Bell Wireline	1,011		979		32		3.3	%
Margin	*38.3*	%	37.1	%			1.2	pts
Bell Wireless	410		403		7		1.7	%
Margin	*39.4*	%	42.1	%			(2.7	) pts
Total Bell	1,421		1,382		39		2.8	%
Margin	*38.8*	%	38.6	%			0.2	pts
Bell Aliant	329		317		12		3.8	%
Margin	*38.0*	%	37.3	%			0.7	pts
Telesat	-		67		(67	)	n.m.
Inter-segment eliminations	-		(23	)	23		n.m.
Total BCE Inc.	1,750		1,743		7		0.4	%
Margin	*39.9*	%	39.7	%			0.2	pts

Operating income

Bell Wireline	178		423		(245	)	(57.9	%)
Bell Wireless	293		291		2		0.7	%
Total Bell	471		714		(243	)	(34.0	%)
Bell Aliant	176		178		(2	)	(1.1	%)
Telesat	-		38		(38	)	n.m.
Inter-segment eliminations	-		(9	)	9		n.m.
Total BCE Inc.	647		921		(274	)	(29.8	%)

Capital expenditures

Bell Wireline	389		400		11		2.8	%
Capital Intensity ⁽⁵⁾	14.7	%	15.2	%			0.5	pts
Bell Wireless	67		141		74		52.5	%
Capital intensity	6.4	%	14.7	%			8.3	pts
Total Bell	456		541		85		15.7	%
Capital Intensity	*12.4*	%	15.1	%			2.7	pts
Bell Aliant	95		115		20		17.4	%
Telesat	-		65		65		n.m.
Total BCE Inc.	551		721		170		23.6	%
Capital Intensity	*12.5*	%	16.4	%			3.9	pts

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

BCE Inc.
Segmented Data - Historical Trend

			Total
($ millions, except where otherwise indicated) (unaudited)	Q1 08		2007		Q4 07		Q3 07		Q2 07		Q1 07

Revenues

Bell Wireline	2,639		10,650		2,724		2,638		2,652		2,636
Bell Wireless	1,041		4,158		1,108		1,079		1,013		958
Inter-segment eliminations	(17	)	(66	)	(17	)	(17	)	(17	)	(15	)
Total Bell	3,663		14,742		3,815		3,700		3,648		3,579
Bell Aliant	865		3,373		859		838		825		851
Telesat	-		458		45		130		161		122
Inter-segment eliminations	(137	)	(708	)	(171	)	(174	)	(196	)	(167	)
Total BCE Inc.	4,391		17,865		4,548		4,494		4,438		4,385

EBITDA

Bell Wireline	1,011		3,869		946		942		1,002		979
Margin	*38.3*	%	36.3	%	34.7	%	35.7	%	37.8	%	37.1	%
Bell Wireless	410		1,640		391		447		399		403
Margin	*39.4*	%	39.4	%	35.3	%	41.4	%	39.4	%	42.1	%
Total Bell	1,421		5,509		1,337		1,389		1,401		1,382
Margin	*38.8*	%	37.4	%	35.0	%	37.5	%	38.4	%	38.6	%
Bell Aliant	329		1,303		320		343		323		317
Margin	*38.0*	%	38.6	%	37.3	%	40.9	%	39.2	%	37.3	%
Telesat	-		263		23		80		93		67
Inter-segment eliminations	-		(87	)	(6	)	(21	)	(37	)	(23	)
Total BCE Inc.	1,750		6,988		1,674		1,791		1,780		1,743
Margin	*39.9*	%	39.1	%	36.8	%	39.9	%	40.1	%	39.7	%

Operating income

Bell Wireline	178		1,430		263		347		397		423
Bell Wireless	293		1,198		283		336		288		291
Total Bell	471		2,628		546		683		685		714
Bell Aliant	176		718		181		177		182		178
Telesat	-		157		12		47		60		38
Inter-segment eliminations	-		(44	)	(1	)	(8	)	(26	)	(9	)
Total BCE Inc.	647		3,459		738		899		901		921

Capital expenditures

Bell Wireline	389		1,964		622		483		459		400
Capital Intensity	*14.7*	%	18.4	%	22.8	%	18.3	%	17.3	%	15.2	%
Bell Wireless	67		455		143		91		80		141
Capital Intensity	*6.4*	%	10.9	%	12.9	%	8.4	%	7.9	%	14.7	%
Total Bell	456		2,419		765		574		539		541
Capital Intensity	*12.4*	%	16.4	%	20.1	%	15.5	%	14.8	%	15.1	%
Bell Aliant	95		543		144		140		144		115
Telesat	-		188		10		50		63		65
Total BCE Inc.	551		3,150		919		764		746		721
Capital Intensity	*12.5*	%	17.6	%	20.2	%	17.0	%	16.8	%	16.4	%

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

Bell Wireline ⁽²⁾

	Q1		Q1
($ millions, except where otherwise indicated) (unaudited)	2008		2007		% change
Bell Wireline
Local & access	848		910		(6.8	%)
Long distance	298		310		(3.9	%)
Data	921		893		3.1	%
Video	356		314		13.4	%
Equipment & other	170		167		1.8	%
Total external revenues	2,593		2,594		(0.0	%)
Inter-segment revenues	46		42		9.5	%
Total Bell Wireline operating revenue	2,639		2,636		0.1	%
Operating expenses	(1,628	)	(1,657	)	1.8	%
EBITDA	1,011		979		3.3	%
EBITDA Margin	*38.3*	%	37.1	%	1.2	pts
Operating income	178		423		(57.9	%)
Capital expenditures	389		400		2.8	%
Capital intensity	*14.7*	%	15.2	%	0.5	pts
Local
Network access services (NAS) (k)
Residential ^(A)	4,500		5,030		(10.5	%)
Business ^(B) (C)	3,240		3,608		(10.2	%)
Total	7,740		8,638		(10.4	%)
Network access service net activations/(losses) (k)
Residential	(106	)	(131	)	19.1	%
Business ^(B) (C)	(13	)	24		n.m.
Total	(119	)	(107	)	(11.2	%)
ADJUSTED ^(D)
Network access services (k)
Residential ^(D)	4,500		4,986		(9.7	%)
Business ^(D)	3,240		3,300		(1.8	%)
Total	7,740		8,286		(6.6	%)
Network access service net activations/(losses) (k)
Residential	(106	)	(131	)	19.1	%
Business ^(E)	(13	)	(22	)	40.9	%
Total	(119	)	(153	)	22.2	%
Long Distance (LD)
Conversation minutes (M)	2,930		3,240		(9.6	%)
Average revenue per minute ($)	0.093		0.090		3.3	%
ISP
High Speed Internet net activations ^(F) (k)	10		41		(75.6	%)
High Speed Internet subscribers EOP^(G) (k)	2,014		1,932		4.2	%
Video (DTH and VDSL)
Video EBITDA	77		55		40.0	%
Net subscriber activations (k)	1		4		(75.0	%)
Total subscribers EOP (k)	1,823		1,824		(0.1	%)
ARPU ⁽⁶⁾($/month)	65		57		14.0	%
Churn ⁽⁷⁾(%) (average per month)	1.1	%	1.1	%	0.0	pts

(A)	At the beginning of Q1 2008, an adjustment of 44k was made to our NAS count, reflecting an extensive review of our historical customer account records.
(B)	In Q1 2008, we adjusted our beginning-of-period business NAS customer base to write-off 273k lines following formal notification received from a major wholesale customer in Q4 2007 that it was in the process of migrating all of its subscribers onto its own network facilities.
(C)	The Q3 2007 opening business network access services subscriber base was decreased by 58k to adjust for an overstatement arising from past methodology for calculating local inter-connections.
(D)	NAS has been adjusted for prior periods to reflect notes A and B above.
(E)	NAS net activations/(losses) throughout 2007 have been adjusted to reflect note B above.
(F)	In Q4 2007, we reduced total net activations by 11k to correct for customer churn adjustments in the first three quarters of 2007.
(G)	The Q1 2007 beginning of year High Speed Internet subscriber base was increased by 18k to adjust for prior-year deactivations related to a major upgrade of our order management system. In addition, the Q1 2007 and Q2 2007 beginning of year High Speed Internet subscriber bases were decreased by 4k and 11k respectively to adjust for the removal of customers who had no network usage in 2007.

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

Bell Wireline - Historical Trend

			Total
($ millions, except where otherwise indicated) (unaudited)	Q1 08		2007		Q4 07		Q3 07		Q2 07		Q1 07
Bell Wireline
Local & access	848		3,586		874		892		910		910
Long distance	298		1,219		296		306		307		310
Data	921		3,641		976		892		880		893
Video	356		1,317		351		330		322		314
Equipment & other	170		708		182		169		190		167
Total external revenues	2,593		10,471		2,679		2,589		2,609		2,594
Inter-segment revenues	46		179		45		49		43		42
Total Bell Wireline operating revenue	2,639		10,650		2,724		2,638		2,652		2,636
Operating expenses	(1,628	)	(6,781	)	(1,778	)	(1,696	)	(1,650	)	(1,657	)
EBITDA	1,011		3,869		946		942		1,002		979
EBITDA Margin	*38.3*	%	36.3	%	34.7	%	35.7	%	37.8	%	37.1	%
Operating income	178		1,430		263		347		397		423
Capital expenditures	389		1,964		622		483		459		400
Capital intensity	*14.7*	%	18.4	%	22.8	%	18.3	%	17.3	%	15.2	%
Local
Network access services (k)
Residential ^(A)	4,500		4,650		4,650		4,767		4,871		5,030
Business ^(B) (C)	3,240		3,526		3,526		3,606		3,653		3,608
Total	7,740		8,176		8,176		8,373		8,524		8,638
Network access service net activations/(losses) (k)
Residential	(106	)	(511	)	(117	)	(104	)	(159	)	(131	)
Business ^(B) (C)	(13	)	-		(80	)	11		45		24
Total	(119	)	(511	)	(197	)	(93	)	(114	)	(107	)
ADJUSTED ^(D)
Network access services (k)
Residential ^(D)	4,500		4,606		4,606		4,723		4,827		4,986
Business ^(D)	3,240		3,253		3,253		3,275		3,288		3,300
Total	7,740		7,859		7,859		7,998		8,115		8,286
Network access service net activations/(losses) (k)
Residential	(106	)	(511	)	(117	)	(104	)	(159	)	(131	)
Business ^(E)	(13	)	(69	)	(22	)	(13	)	(12	)	(22	)
Total	(119	)	(580	)	(139	)	(117	)	(171	)	(153	)
Long Distance (LD)
Conversation minutes (M)	2,930		12,500		3,049		2,962		3,249		3,240
Average revenue per minute ($)	0.093		0.091		0.089		0.097		0.088		0.090
ISP
High Speed Internet net activations ^(F)(k)	10		124		29		29		25		41
High Speed Internet subscribers EOP ^(G)(k)	2,014		2,004		2,004		1,975		1,946		1,932
Video (DTH and VDSL)
Video EBITDA	77		265		77		65		68		55
Net subscriber activations (k)	1		2		2		3		(7	)	4
Total subscribers EOP (k)	1,823		1,822		1,822		1,820		1,817		1,824
ARPU ($/month)	65		60		64		60		58		57
Churn (%) (average per month)	1.1	%	1.2	%	1.3	%	1.3	%	1.3	%	1.1	%


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

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

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

(D)	NAS has been adjusted for prior periods to reflect notes A and B above.

(E)	NAS net activations/(losses) throughout 2007 have been adjusted to reflect note B above.

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

(G)

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

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

Bell Wireless ⁽²⁾

	Q1		Q1
($ millions, except where otherwise indicated) (unaudited)	2008		2007		% change

Bell Wireless

Revenue
Network	955		889		7.4	%
Equipment	74		57		29.8	%
Total external Bell Wireless revenues	1,029		946		8.8	%
Inter-segment	12		12		0.0	%
Total Bell Wireless operating revenues	1,041		958		8.7	%
Operating expenses	(631	)	(555	)	(13.7	%)
EBITDA	410		403		1.7	%
EBITDA margin (Total revenues)	*39.4*	%	42.1	%	(2.7	) pts
EBITDA margin (Network revenues)	*42.9*	%	45.3	%	(2.4	) pts
Operating Income	293		291		0.7	%

Capital expenditures	67		141		52.5	%
Capital intensity	6.4	%	14.7	%	8.3	pts

Wireless gross activations ^(A)(k)	351		296		18.6	%
Post-paid	198		167		18.6	%


Wireless net activations ^(A)(k)	34		13		n.m.
Post-paid	28		10		n.m.


Wireless subscribers EOP ^{(A) (B)}(k)	6,250		5,821		7.4	%
Post-paid	4,478		4,254		5.3	%


Average revenue per unit (ARPU) ^(C)($/month)	52		52		0.0	%
Pre-paid	17		15		13.3	%
Post-paid	64		64		0.0	%

Churn ^(C)(%) (average per month)	1.6	%	1.6	%	0.0	pts
Pre-paid	2.8	%	2.9	%	0.1	pts
Post-paid	1.3	%	1.2	%	(0.1	) pts

Usage per subscriber ^(C)(min/month)	281		266		5.6	%
Cost of acquisition (COA) ^{(C) (8)}($/sub)	396		420		5.7	%

Paging subscribers (k)	216		262		(17.6	%)
Paging average revenue per unit ($/month)	11		10		10.0	%


(A)	Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)	The Q1 2007 beginning of year wireless subscriber base was decreased by 146k as a result of a change to our prepaid deactivation policy.
(C)	Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect only the 50% portion of Virgin Mobile’s results that are consolidated.

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

Bell Wireless - Historical Trend

			Total
($ millions, except where otherwise indicated) (unaudited)	Q1 08		2007		Q4 07		Q3 07		Q2 07		Q1 07
Bell Wireless

Revenue
Network	955		3,768		979		977		923		889
Equipment	74		332		112		88		75		57
Total external Bell Wireless revenues	1,029		4,100		1,091		1,065		998		946
Inter-segment revenue	12		58		17		14		15		12
Total Bell Wireless operating revenues	1,041		4,158		1,108		1,079		1,013		958
Operating expenses	(631	)	(2,518	)	(717	)	(632	)	(614	)	(555	)
EBITDA	410		1,640		391		447		399		403
EBITDA margin (Total revenues)	*39.4*	%	39.4	%	35.3	%	41.4	%	39.4	%	42.1	%
EBITDA margin (Network revenues)	*42.9*	%	43.5	%	39.9	%	45.8	%	43.2	%	45.3	%
Operating Income	293		1,198		283		336		288		291

Capital expenditures	67		455		143		91		80		141
Capital intensity	6.4	%	10.9	%	12.9	%	8.4	%	7.9	%	14.7	%

Wireless gross activations ^(A)(k)	351		1,640		510		445		389		296
Post-paid	198		910		261		254		228		167


Wireless net activations ^(A)(k)	34		408		195		137		63		13
Post-paid	28		206		77		76		43		10


Wireless subscribers EOP ^{(A) (B)}(k)	6,250		6,216		6,216		6,021		5,884		5,821
Post-paid	4,478		4,450		4,450		4,373		4,297		4,254


Average revenue per unit (ARPU) ^(C)($/month)	52		54		55		56		54		52
Pre-paid	17		17		18		19		17		15
Post-paid	64		66		67		68		65		64

Churn (%) ^(C)(average per month)	1.6	%	1.7	%	1.7	%	1.7	%	1.8	%	1.6	%
Pre-paid	2.8	%	2.8	%	2.7	%	2.7	%	3.1	%	2.9	%
Post-paid	1.3	%	1.3	%	1.4	%	1.4	%	1.4	%	1.2	%

Usage per subscriber ^(C)(min/month)	281		288		299		297		289		266
Cost of acquisition (COA) ^(C)($/sub)	396		404		392		371		442		420

Paging subscribers (k)	216		222		222		236		250		262
Paging average revenue per unit ($/month)	11		11		11		11		11		10


(A)	Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)	The Q1 2007 beginning of year wireless subscriber base was decreased by 146k as a result of a change to our prepaid deactivation policy.
(C)	Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect only the 50% portion of Virgin Mobile’s results that are consolidated.

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

BCE Inc.
Net debt and other information ⁽²⁾

BCE Inc. - Net debt and preferreds

At March 31, 2008	BCE Inc.
(unaudited)
($ millions, except where otherwise indicated)
			Bell		Inter-segment
	Bell		Aliant		eliminations	BCE Inc.

Cash and cash equivalents	(2,471	)	(10	)	-	(2,481	)
Debt due within one year	393		344		-	737
Long-term debt	8,116		2,506		-	10,622
Net debt	6,038		2,840		-	8,878
Preferred shares - BCE	2,770		-		-	2,770
Net debt and preferreds	8,808		2,840		-	11,648

Bell - Balance Sheet Information
(unaudited)
($ millions, except where otherwise indicated)	March 31		Dec. 31
	2008		2007

Net Debt
Long-term debt	8,116		8,115
Debt due within one year	393		440
Less: Cash and cash equivalents	(2,471	)	(2,608	)
Total Net Debt	6,038		5,947
Non-controlling interest	65		64
Total shareholders’ equity	19,639		19,606
Total Capitalization	25,742		25,617

Net Debt: Total Capitalization	23.5	%	23.2	%
Net Debt: Trailing 12 month EBITDA	1.09		1.08
EBITDA : Interest (trailing 12 month)	7.95		7.65

BCE Inc. - Cash Flow Information
(unaudited)	Q1		Q1
($ millions, except where otherwise indicated)	2008		2007		$ change		% change
Free Cash Flow (FCF) ⁽³⁾
Cash from operating activities	712		656		56		8.5	%
Capital expenditures	(456	)	(541	)	85		15.7	%
Dividends and distributions	(328	)	(314	)	(14	)	(4.5	%)
Other investing items	1		1		-		0.0	%
BELL FCF	(71	)	(198	)	127		64.1	%
Bell Aliant FCF	(4	)	50		(54	)	n.m.
Telesat FCF	-		3		(3	)	n.m.
Inter-segment eliminations	-		(12	)	12		n.m.
Total BCE FCF	(75	)	(157	)	82		52.2	%

BCE Inc. - Cash Flow Information - Historical Trend
(unaudited)	Q1		Total
($ millions, except where otherwise indicated)	2008		2007		Q4 07		Q3 07		Q2 07		Q1 07

Free Cash Flow (FCF)
Cash from operating activities	712		4,219		1,361		1,231		971		656
Capital expenditures	(456	)	(2,419	)	(765	)	(574	)	(539	)	(541	)
Dividends and distributions	(328	)	(1,306	)	(327	)	(326	)	(339	)	(314	)
Other investing items	1		12		8		4		(1	)	1
BELL FCF	(71	)	506		277		335		92		(198	)
Bell Aliant FCF	(4	)	399		104		63		182		50
Telesat FCF	-		51		22		31		(5	)	3
Inter-segment eliminations	-		(53	)	(7	)	(5	)	(29	)	(12	)
Total BCE FCF	(75	)	903		396		424		240		(157	)

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

BCE Inc.
Consolidated Balance Sheet Data

	March 31		December 31
($ millions, except where otherwise indicated) (unaudited)	2008		2007

*ASSETS*
Current assets
Cash and cash equivalents	2,481		2,657
Accounts receivable	2,010		1,940
Future income taxes	95		71
Inventory	280		266
Prepaid expenses	439		277
Current assets of discontinued operations	2		1
Total current assets	5,307		5,212
Capital assets
Property, plant and equipment	18,387		18,600
Finite-life intangible assets	2,674		2,491
Indefinite-life intangible assets	2,954		2,913
Total capital assets	24,015		24,004
Other long-term assets	2,898		2,952
Goodwill	5,740		5,907
Non-current assets of discontinued operations	6		6
Total assets	37,966		38,081
*LIABILITIES*
Current liabilities
Accounts payable and accrued liabilities	2,774		3,291
Interest payable	172		145
Dividends payable	337		337
Debt due within one year	737		717
Current liabilities of discontinued operations	-		2
Total current liabilities	4,020		4,492
Long-term debt	10,622		10,621
Other long-term liabilities	4,989		4,633
Total liabilities	19,631		19,746
Non-controlling interest	1,087		1,103
*SHAREHOLDERS’ EQUITY*
Preferred shares	2,770		2,770
Common shareholders’ equity
Common shares	13,537		13,536
Contributed surplus	2,538		2,537
Accumulated other comprehensive income	118		68
Deficit	(1,715	)	(1,679	)
Total common shareholders’ equity	14,478		14,462
Total shareholders’ equity	17,248		17,232
Total liabilities and shareholders’ equity	37,966		38,081

Number of common shares outstanding	805.3		805.3

Total Net Debt	8,878		8,681
Total Capitalization	27,213		27,016

Key ratios

Net debt : Total Capitalization	32.6	%	32.1	%
Net debt : Trailing 12 month EBITDA	1.27		1.24
EBITDA : Interest (trailing 12 month)	8.31		8.14

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

BCE Inc.
Consolidated Cash Flow Data

		Q1			Q1
($ millions, except where otherwise indicated) (unaudited)		2008			2007			$ change
Cash flows from operating activities
Net earnings		289			529			(240	)
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities
Depreciation and amortization of intangible assets		820			786			34
Net benefit plans cost		71			102			(31	)
Restructuring and other		283			36			247
Losses (gains) on investments		2			(121	)		123
Future income taxes		(67	)		111			(178	)
Non-controlling interest		73			95			(22	)
Contributions to employee pension plans		(44	)		(108	)		64
Other employee future benefit plan payments		(23	)		(24	)		1
Payments of restructuring and other		(24	)		(52	)		28
Operating assets and liabilities		(486	)		(386	)		(100	)
		894			968			(74	)
Capital expenditures		(551	)		(721	)		170
Other investing activities		1			2			(1	)
Cash dividends paid on preferred shares		(35	)		(23	)		(12	)
Cash dividends/distributions paid by subsidiaries to non-controlling interest		(90	)		(113	)		23
Free Cash Flow from operations, before common dividends		219			113			106
Cash dividends paid on common shares		(294	)		(270	)		(24	)
Free Cash Flow used in operations, after common dividends		(75	)		(157	)		82
Business acquisitions		(31	)		(147	)		116
Business dispositions		(10	)		-			(10	)
Bell Aliant		-			(4	)		4
Going-private costs		(9	)		-			(9	)
Increase in investments		(2	)		(13	)		11
Decrease in investments		-			7			(7	)
Free Cash Flow after investments and divestitures		(127	)		(314	)		187
Other financing activities
Increase in notes payable and bank advances		65			315			(250	)
Issue of long-term debt		-			1,025			(1,025	)
Repayment of long-term debt		(102	)		(1,175	)		1,073
Issue of common shares		1			14			(13	)
Repurchase of common shares		-			(223	)		223
Redemption of equity securities by subsidiaries from non-controlling interest		-			(74	)		74
Other financing activities		(11	)		(41	)		30
		(47	)		(159	)		112
Cash flows used in continuing operations		(174	)		(473	)		299
Cash flows used in discontinued operations activities		(1	)		-			(1	)
Cash flows used in discontinued investing activities		-			(1	)		1
Cash flows from discontinued financing activities		-			3			(3	)
Net decrease in cash and cash equivalents		(175	)		(471	)		296
Cash and cash equivalents at beginning of period		2,657			581			2,076
Cash and cash equivalents at end of period		2,482			110			2,372
Consists of:
Cash and cash equivalents of continuing operations		2,481			104			2,377
Cash and cash equivalents of discontinued operations		1			6			(5	)
Total		2,482			110			2,372

Other information
Cash flow per share ⁽⁹⁾	$	0.43		$	0.31		$	0.12
Annualized cash flow yield ⁽¹⁰⁾		3.1	%		1.7	%		1.4	pts
Common dividend payout ⁽¹¹⁾		64.0	%		70.2	%		(6.2	) pts

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

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

					Total
($ millions, except where otherwise indicated) (unaudited)		Q1 08			2007			Q4 07			Q3 07			Q2 07			Q1 07
Cash flows from operating activities
Net earnings		289			4,057			2,388			440			700			529
less: Earnings (losses) from discontinued operations, net of tax		-			116			(16	)		(4	)		136			-
Earnings from continuing operations		289			3,941			2,404			444			564			529
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities
Depreciation and amortization of intangible assets		820			3,197			790			814			807			786
Net benefit plans cost		71			410			113			97			98			102
Restructuring and other		283			332			146			78			72			36
Losses (gains) on investments		2			(2,414	)		(2,289	)		(6	)		2			(121	)
Future income taxes		(67	)		409			193			215			(110	)		111
Non-controlling interest		73			332			65			84			88			95
Contributions to employee pension plans		(44	)		(265	)		(36	)		(42	)		(79	)		(108	)
Other employee future benefit plan payments		(23	)		(96	)		(25	)		(23	)		(24	)		(24	)
Payments of restructuring and other		(24	)		(118	)		(27	)		(20	)		(19	)		(52	)
Operating assets and liabilities		(486	)		(14	)		388			(36	)		20			(386	)
		894			5,714			1,722			1,605			1,419			968
Capital expenditures		(551	)		(3,150	)		(919	)		(764	)		(746	)		(721	)
Other investing activities		1			14			9			4			(1	)		2
Cash dividends paid on preferred shares		(35	)		(124	)		(34	)		(34	)		(33	)		(23	)
Cash dividends/distributions paid by subsidiaries to non-controlling interest		(90	)		(404	)		(88	)		(94	)		(109	)		(113	)
Free Cash Flow from operations, before common dividends		219			2,050			690			717			530			113
Cash dividends paid on common shares		(294	)		(1,147	)		(294	)		(293	)		(290	)		(270	)
Free Cash Flow (used in) from operations, after common dividends		(75	)		903			396			424			240			(157	)
Business acquisitions		(31	)		(163	)		-			(14	)		(2	)		(147	)
Business dispositions		(10	)		3,123			3,123			-			-			-
Bell Aliant		-			(7	)		-			-			(3	)		(4	)
Going-private costs		(9	)		(49	)		(13	)		(36	)		-			-
Increase in investments		(2	)		(27	)		(6	)		(5	)		(3	)		(13	)
Decrease in investments		-			192			129			50			6			7
Free Cash Flow after investments and divestitures		(127	)		3,972			3,629			419			238			(314	)
Other financing activities
Increase (decrease) in notes payable and bank advances		65			211			(267	)		(345	)		508			315
Issue of long-term debt		-			1,071			-			16			30			1,025
Repayment of long-term debt		(102	)		(3,048	)		(947	)		(89	)		(837	)		(1,175	)
Issue of common shares		1			153			5			16			118			14
Repurchase of common shares		-			(227	)		-			-			(4	)		(223	)
Redemption of equity securities by subsidiaries from non-controlling interest		-			(333	)		(4	)		(117	)		(138	)		(74	)
Other financing activities		(11	)		(66	)		(13	)		(5	)		(7	)		(41	)
		(47	)		(2,239	)		(1,226	)		(524	)		(330	)		(159	)
Cash flows (used in) from continuing operations		(174	)		1,733			2,403			(105	)		(92	)		(473	)
Cash flows (used in) from discontinued operations activities		(1	)		(24	)		(10	)		(6	)		(8	)		-
Cash flows from (used in) discontinued investing activities		-			351			(2	)		2			352			(1	)
Cash flows from discontinued financing activities		-			16			7			3			3			3
Net (decrease) increase in cash and cash equivalents		(175	)		2,076			2,398			(106	)		255			(471	)
Cash and cash equivalents at beginning of period		2,657			581			259			365			110			581
Cash and cash equivalents at end of period		2,482			2,657			2,657			259			365			110
Consists of:
Cash and cash equivalents of continuing operations		2,481			2,657			2,657			258			364			104
Cash and cash equivalents of discontinued operations		1			-			-			1			1			6
Total		2,482			2,657			2,657			259			365			110

Other information
Cash flow per share	$	0.43		$	3.19		$	1.00		$	1.04		$	0.84		$	0.31
Annualized cash flow yield		3.1	%		6.4	%		8.6	%		8.9	%		6.5	%		1.7	%
Common dividend payout		64.0	%		62.4	%		50.7	%		67.6	%		65.2	%		70.2	%

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

Accompanying Notes

(1)		Throughout this report, BCE means BCE Inc., its subsidiaries and joint ventures; Bell means our Bell Wireline and Bell Wireless segments on an aggregate basis; and Bell Aliant means Bell Aliant Regional Communications Income Fund and its affiliated entities. We have reclassified some of the figures for the comparative periods in the consolidated financial statements to make them consistent with the presentation for the current period. We have restated financial information for the previous periods to reflect our decision in 2008 to cease operations of certain of our investments. All of these investments are now shown as discontinued operations. Telesat Canada (Telesat) was sold on October 31, 2007 and we have continuing commercial arrangements between Telesat and Bell Express Vu Limited Partnership (Bell Express Vu) that provide Bell ExpressVu continued access to current and expanded satellite capacity. As a result of these arrangements, we have not accounted for Telesat as a discontinued operation.
(2)		We report our results of operations in four segments: Bell Wireline, Bell Wireless, Bell Aliant and Telesat. Our reporting structure reflects how we manage our business and how we classify our operations for planning and measuring performance. Accordingly, we operate and manage our reportable segments as strategic business units organized by products and services.
(3)		Non-GAAP Financial Measures EBITDA The term EBITDA (earnings before interest, taxes, depreciation and amortization of intangible assets) does not have any standardized meaning according to Canadian generally accepted accounting principles (GAAP). It is therefore unlikely to be comparable to similar measures presented by other companies. We define EBITDA as operating revenues less cost of revenue, selling, general and administrative expenses and net benefit plans costs, meaning it represents operating income before depreciation, amortization of intangible assets and restructuring and other. We use EBITDA, among other measures, to assess the operating performance of our ongoing businesses without the effects of depreciation, amortization of intangible assets and restructuring and other. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. We exclude depreciation and amortization of intangible assets because it largely depends on the accounting methods and assumptions a company uses, as well as non-operating factors, such as the historical cost of capital assets. Excluding restructuring and other does not imply they are non-recurring. EBITDA allows us to compare our operating performance on a consistent basis. We believe that certain investors and analysts use EBITDA to measure a company’s ability to service debt and to meet other payment obligations, or as a common valuation measurement in the telecommunications industry. The most comparable Canadian GAAP financial measure is operating income. Earnings per share (EPS) before restructuring and other and net gains on investments The term EPS before restructuring and other and net gains on investments does not have any standardized meaning according to Canadian GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies. We use EPS before restructuring and other and net gains on investments among other measures, to assess the operating performance of our ongoing businesses without the effects of after-tax restructuring and other and net gains on investments. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring. The most comparable Canadian GAAP financial measure is EPS.

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

Accompanying Notes (continued)

		FREE CASH FLOW We define free cash flow as cash from operating activities after capital expenditures, total dividends and other investing activities. The term free cash flow does not have any standardized meaning according to Canadian GAAP. It is therefore unlikely to be comparable to similar measures presented other companies. We consider free cash flow to be an important indicator of the financial strength and performance of our business because it shows how much cash is available to repay debt and to reinvest in our company. We present free cash flow on a consistent basis from period to period, which allows us to compare our financial performance on consistent basis. We believe that certain investors and analysts use free cash flow when valuing a business and its underlying assets. The most comparable Canadian GAAP financial measure is cash from operating activities.
(4)		EBITDA margin is calculated as follows: EBITDA Operating revenues
(5)		Capital Intensity is calculated as follows: Capital expenditures Operating revenues
(6)		Average revenue per unit (ARPU) represents the measurement of the average revenue generated by each unit, expressed as a rate per month for the year.
(7)		Churn is the rate at which existing subscribers cancel their services. Churn is calculated as the number of subscribers disconnected divided by the average subscriber base.
(8)		Cost of acquisition (COA) is also referred to as subscriber acquisition costs. This measure is expressed per gross activation. It includes costs associated with acquiring a customer such as hardware subsidies, marketing and distribution costs.
(9)		Cash flow per share is calculated as follows: Cash flow from operating activities less capital expenditures Average number of common shares outstanding
(10)		Annualized cash flow yield is calculated as follows: Free cash flow from operations before common dividends Number of common shares outstanding at end of period multiplied by share price at end of period Note: to annualize, multiply the most recent quarter’s resultant by 4.
(11)		Common dividend payout is calculated as follows: Dividends per common share EPS before restructuring and other and net gains on investments

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