Supplementary Financial Information BCE Second Quarter 2008

EX-3 4 supp_q2.htm SUPPLEMENTARY FINANCIAL INFORMATION - BCE Q2 2008 Supplementary Financial Information BCE Second Quarter 2008

EXHIBIT 3

BCE Inc. ⁽¹⁾

Consolidated Operational Data

		Q2			Q2								YTD			YTD
($ millions, except per share amounts) (unaudited)		2008			2007			$ change		% change			2008			2007			$ change		% change
Operating revenues		4,422			4,427			(5	)	(0.1	%)		8,802			8,801			1		0.0	%
Cost of revenue, exclusive of depreciation and amortization		(1,089	)		(990	)		(99	)	(10.0	%)		(2,154	)		(1,973	)		(181	)	(9.2	%)
Selling, general and administrative expenses ^(A)		(1,522	)		(1,560	)		38		2.4	%		(3,017	)		(3,107	)		90		2.9	%
Net benefit plans cost		(70	)		(98	)		28		28.6	%		(141	)		(200	)		59		29.5	%
EBITDA ⁽³⁾		1,741			1,779			(38	)	(2.1	%)		3,490			3,521			(31	)	(0.9	%)
EBITDA margin ⁽⁴⁾		*39.4*	%		40.2	%				(0.8	) pts		*39.7*	%		40.0	%				(0.3	) pts
Depreciation		(612	)		(650	)		38		5.8	%		(1,235	)		(1,282	)		47		3.7	%
Amortization of intangible assets		(176	)		(155	)		(21	)	(13.5	%)		(371	)		(309	)		(62	)	(20.1	%)
Restructuring and other		(71	)		(71	)		-		0.0	%		(354	)		(107	)		(247	)	n.m.
Operating income		882			903			(21	)	(2.3	%)		1,530			1,823			(293	)	(16.1	%)
Other income (expense)		3			(21	)		24		n.m.			26			112			(86	)	(76.8	%)
Interest expense		(193	)		(220	)		27		12.3	%		(391	)		(435	)		44		10.1	%
Pre-tax earnings from continuing operations		692			662			30		4.5	%		1,165			1,500			(335	)	(22.3	%)
Income taxes		(193	)		(10	)		(183	)	n.m.			(302	)		(223	)		(79	)	(35.4	%)
Non-controlling interest		(88	)		(87	)		(1	)	(1.1	%)		(162	)		(183	)		21		11.5	%
Earnings from continuing operations		411			565			(154	)	(27.3	%)		701			1,094			(393	)	(35.9	%)
Discontinued operations		(19	)		135			(154	)	n.m.			(20	)		135			(155	)	n.m.
Net earnings		392			700			(308	)	(44.0	%)		681			1,229			(548	)	(44.6	%)
Dividends on preferred shares		(31	)		(33	)		2		6.1	%		(62	)		(63	)		1		1.6	%
Net earnings applicable to common shares		361			667			(306	)	(45.9	%)		619			1,166			(547	)	(46.9	%)
Net earnings per common share - basic
Continuing operations	$	0.47		$	0.66		$	(0.19	)	(28.8	%)	$	0.79		$	1.28		$	(0.49	)	(38.3	%)
Discontinued operations	$	(0.02	)	$	0.17		$	(0.19	)	n.m.		$	(0.02	)	$	0.17		$	(0.19	)	n.m.
Net earnings	$	0.45		$	0.83		$	(0.38	)	(45.8	%)	$	0.77		$	1.45		$	(0.68	)	(46.9	%)
Net earnings per common share - diluted
Continuing operations	$	0.47		$	0.66		$	(0.19	)	(28.8	%)	$	0.79		$	1.28		$	(0.49	)	(38.3	%)
Discontinued operations	$	(0.02	)	$	0.17		$	(0.19	)	n.m.		$	(0.02	)	$	0.17		$	(0.19	)	n.m.
Net earnings	$	0.45		$	0.83		$	(0.38	)	(45.8	%)	$	0.77		$	1.45		$	(0.68	)	(46.9	%)
Dividends per common share	$	-		$	0.365		$	(0.365	)	(100.0	%)	$	0.365		$	0.730		$	(0.365	)	(50.0	%)
Average number of common shares outstanding - basic (millions)		805.6			803.2								805.4			804.6
Average number of common shares outstanding - diluted (millions)		807.2			805.5								807.1			805.8

The following items are included in net earnings:
Net gains (losses) on investments
Continuing operations		4			132			(128	)	(97.0	%)		2			235			(233	)	(99.1	%)
Discontinued operations		(20	)		135			(155	)	n.m.			(20	)		136			(156	)	n.m.
Restructuring and other		(48	)		(45	)		(3	)	(6.7	%)		(245	)		(70	)		(175	)	n.m.
Total		(64	)		222			(286	)	n.m.			(263	)		301			(564	)	n.m.
Impact on net earnings per share	$	(0.08	)	$	0.27		$	(0.35	)	n.m.		$	(0.33	)	$	0.37		$	(0.70	)	n.m.
EPS before restructuring and other and net gains on investments ⁽³⁾	$	0.53		$	0.56		$	(0.03	)	(5.4	%)	$	1.10		$	1.08		$	0.02		1.9	%

(A)	Excludes net benefit plans cost
n.m. : not meaningful

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

BCE Inc.

Consolidated Operational Data - Historical Trend

		YTD									Total
($ millions, except per share amounts) (unaudited)		2008			Q2 08			Q1 08			2007			Q4 07			Q3 07			Q2 07			Q1 07
Operating revenues		8,802			4,422			4,380			17,822			4,537			4,484			4,427			4,374
Cost of revenue, exclusive of depreciation and amortization		(2,154	)		(1,089	)		(1,065	)		(4,122	)		(1,151	)		(998	)		(990	)		(983	)
Selling, general and administrative expenses ^(A)		(3,017	)		(1,522	)		(1,495	)		(6,305	)		(1,601	)		(1,597	)		(1,560	)		(1,547	)
Net benefit plans cost		(141	)		(70	)		(71	)		(410	)		(113	)		(97	)		(98	)		(102	)
EBITDA		3,490			1,741			1,749			6,985			1,672			1,792			1,779			1,742
*EBITDA margin*		*39.7*	%		*39.4*	%		39.9	%		39.2	%		36.9	%		40.0	%		40.2	%		39.8	%
Depreciation		(1,235	)		(612	)		(623	)		(2,547	)		(616	)		(649	)		(650	)		(632	)
Amortization of intangible assets		(371	)		(176	)		(195	)		(639	)		(167	)		(163	)		(155	)		(154	)
Restructuring and other		(354	)		(71	)		(283	)		(331	)		(146	)		(78	)		(71	)		(36	)
Operating income		1,530			882			648			3,468			743			902			903			920
Other income (expense)		26			3			23			2,404			2,298			(6	)		(21	)		133
Interest expense		(391	)		(193	)		(198	)		(859	)		(211	)		(213	)		(220	)		(215	)
Pre-tax earnings from continuing operations		1,165			692			473			5,013			2,830			683			662			838
Income taxes		(302	)		(193	)		(109	)		(733	)		(356	)		(154	)		(10	)		(213	)
Non-controlling interest		(162	)		(88	)		(74	)		(333	)		(66	)		(84	)		(87	)		(96	)
Earnings from continuing operations		701			411			290			3,947			2,408			445			565			529
Discontinued operations		(20	)		(19	)		(1	)		110			(20	)		(5	)		135			-
Net earnings		681			392			289			4,057			2,388			440			700			529
Dividends on preferred shares		(62	)		(31	)		(31	)		(131	)		(34	)		(34	)		(33	)		(30	)
Net earnings applicable to common shares		619			361			258			3,926			2,354			406			667			499
Net earnings per common share - basic
Continuing operations	$	0.79		$	0.47		$	0.32		$	4.74		$	2.95		$	0.51		$	0.66		$	0.62
Discontinued operations	$	(0.02	)	$	(0.02	)	$	-		$	0.14		$	(0.02	)	$	(0.01	)	$	0.17		$	-
Net earnings	$	0.77		$	0.45		$	0.32		$	4.88		$	2.93		$	0.50		$	0.83		$	0.62
Net earnings per common share - diluted
Continuing operations	$	0.79		$	0.47		$	0.32		$	4.73		$	2.94		$	0.51		$	0.66		$	0.62
Discontinued operations	$	(0.02	)	$	(0.02	)	$	-		$	0.14		$	(0.02	)	$	(0.01	)	$	0.17		$	-
Net earnings	$	0.77		$	0.45		$	0.32		$	4.87		$	2.92		$	0.50		$	0.83		$	0.62
Dividends per common share	$	0.365			-		$	0.365		$	1.460		$	0.365		$	0.365		$	0.365		$	0.365
Average number of common shares outstanding - basic (millions)		805.4			805.6			805.3			804.8			805.2			804.9			803.2			806.0
Average number of common shares outstanding - diluted (millions)		807.1			807.2			807.1			806.9			808.0			807.8			805.5			806.6

The following items are included in net earnings:
Net gains (losses) on investments
Continuing operations		2			4			(2	)		2,125			1,883			7			132			103
Discontinued operations		(20	)		(20	)		-			123			(13	)		-			135			1
Restructuring and other		(245	)		(48	)		(197	)		(206	)		(93	)		(43	)		(45	)		(25	)
Total		(263	)		(64	)		(199	)		2,042			1,777			(36	)		222			79
Impact on net earnings per share	$	(0.33	)	$	(0.08	)	$	(0.25	)	$	2.54		$	2.21		$	(0.04	)	$	0.27		$	0.10
EPS before restructuring and other and net gains on investments	$	1.10		$	0.53		$	0.57		$	2.34		$	0.72		$	0.54		$	0.56		$	0.52

(A)	Excludes net benefit plans cost

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

BCE Inc.

Segmented Data ⁽²⁾

	Q2		Q2						YTD		YTD
($ millions, except where otherwise indicated) (unaudited)	2008		2007		$ change		% change		2008		2007		$ change		% change

Revenues
Bell Wireline	2,600		2,641		(41	)	(1.6	%)	5,229		5,266		(37	)	(0.7	%)
Bell Wireless	1,121		1,013		108		10.7	%	2,162		1,971		191		9.7	%
Inter-segment eliminations	(21	)	(17	)	(4	)	(23.5	%)	(38	)	(32	)	(6	)	(18.8	%)
Total Bell	3,700		3,637		63		1.7	%	7,353		7,205		148		2.1	%
Bell Aliant	846		826		20		2.4	%	1,711		1,677		34		2.0	%
Telesat	-		161		(161	)	n.m.		-		283		(283	)	n.m.
Inter-segment eliminations	(124	)	(197	)	73		37.1	%	(262	)	(364	)	102		28.0	%
Total BCE Inc.	4,422		4,427		(5	)	(0.1	%)	8,802		8,801		1		0.0	%

EBITDA
Bell Wireline	963		1,000		(37	)	(3.7	%)	1,973		1,978		(5	)	(0.3	%)
Margin	*37.0*	%	37.9	%			(0.9	) pts	*37.7*	%	37.6	%			0.1	pts
Bell Wireless	442		399		43		10.8	%	852		802		50		6.2	%
Margin	*39.4*	%	39.4	%			0.0	pt	*39.4*	%	40.7	%			(1.3	) pts
Total Bell	1,405		1,399		6		0.4	%	2,825		2,780		45		1.6	%
Margin	*38.0*	%	38.5	%			(0.5	) pts	*38.4*	%	38.6	%			(0.2	) pts
Bell Aliant	336		325		11		3.4	%	665		641		24		3.7	%
Margin	*39.7*	%	39.3	%			0.4	pts	*38.9*	%	38.2	%			0.7	pts
Telesat	-		93		(93	)	n.m.		-		160		(160	)	n.m.
Inter-segment eliminations	-		(38	)	38		n.m.		-		(60	)	60		n.m.
Total BCE Inc.	1,741		1,779		(38	)	(2.1	%)	3,490		3,521		(31	)	(0.9	%)
Margin	*39.4*	%	40.2	%			(0.8	) pts	*39.7*	%	40.0	%			(0.3	) pts

Operating income
Bell Wireline	366		398		(32	)	(8.0	%)	545		821		(276	)	(33.6	%)
Bell Wireless	316		288		28		9.7	%	609		579		30		5.2	%
Total Bell	682		686		(4	)	(0.6	%)	1,154		1,400		(246	)	(17.6	%)
Bell Aliant	200		183		17		9.3	%	376		360		16		4.4	%
Telesat	-		60		(60	)	n.m.		-		98		(98	)	n.m.
Inter-segment eliminations	-		(26	)	26		n.m.		-		(35	)	35		n.m.
Total BCE Inc.	882		903		(21	)	(2.3	%)	1,530		1,823		(293	)	(16.1	%)

Capital expenditures
Bell Wireline	479		457		(22	)	(4.8	%)	868		857		(11	)	(1.3	%)
Capital Intensity ⁽⁵⁾	18.4	%	17.3	%			(1.1	) pts	*16.6*	%	16.3	%			(0.3	) pts
Bell Wireless	104		80		(24	)	(30.0	%)	171		221		50		22.6	%
Capital intensity	9.3	%	7.9	%			(1.4	) pts	*7.9*	%	11.2	%			3.3	pts
Total Bell	583		537		(46	)	(8.6	%)	1,039		1,078		39		3.6	%
Capital Intensity	*15.8*	%	14.8	%			(1.0	) pt	*14.1*	%	15.0	%			0.9	pts
Bell Aliant	127		144		17		11.8	%	222		259		37		14.3	%
Telesat	-		63		63		n.m.		-		128		128		n.m.
Total BCE Inc.	710		744		34		4.6	%	1,261		1,465		204		13.9	%
Capital Intensity	*16.1*	%	16.8	%			0.7	pts	*14.3*	%	16.6	%			2.3	pts

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

BCE Inc.

Segmented Data - Historical Trend

	YTD						Total
($ millions, except where otherwise indicated) (unaudited)	2008		Q2 08		Q1 08		2007		Q4 07		Q3 07		Q2 07		Q1 07

Revenues
Bell Wireline	5,229		2,600		2,629		10,607		2,713		2,628		2,641		2,625
Bell Wireless	2,162		1,121		1,041		4,158		1,108		1,079		1,013		958
Inter-segment eliminations	(38	)	(21	)	(17	)	(66	)	(18	)	(16	)	(17	)	(15	)
Total Bell	7,353		3,700		3,653		14,699		3,803		3,691		3,637		3,568
Bell Aliant	1,711		846		865		3,373		858		838		826		851
Telesat	-		-		-		458		45		130		161		122
Inter-segment eliminations	(262	)	(124	)	(138	)	(708	)	(169	)	(175	)	(197	)	(167	)
Total BCE Inc.	8,802		4,422		4,380		17,822		4,537		4,484		4,427		4,374

EBITDA
Bell Wireline	1,973		963		1,010		3,866		945		943		1,000		978
Margin	*37.7*	%	*37.0*	%	38.4	%	36.4	%	34.8	%	35.9	%	37.9	%	37.3	%
Bell Wireless	852		442		410		1,640		391		447		399		403
Margin	*39.4*	%	*39.4*	%	39.4	%	39.4	%	35.3	%	41.4	%	39.4	%	42.1	%
Total Bell	2,825		1,405		1,420		5,506		1,336		1,390		1,399		1,381
Margin	*38.4*	%	*38.0*	%	38.9	%	37.5	%	35.1	%	37.7	%	38.5	%	38.7	%
Bell Aliant	665		336		329		1,303		319		343		325		316
Margin	*38.9*	%	*39.7*	%	38.0	%	38.6	%	37.2	%	40.9	%	39.3	%	37.1	%
Telesat	-		-		-		263		23		80		93		67
Inter-segment eliminations	-		-		-		(87	)	(6	)	(21	)	(38	)	(22	)
Total BCE Inc.	3,490		1,741		1,749		6,985		1,672		1,792		1,779		1,742
Margin	*39.7*	%	*39.4*	%	39.9	%	39.2	%	36.9	%	40.0	%	40.2	%	39.8	%

Operating income
Bell Wireline	545		366		179		1,439		269		349		398		423
Bell Wireless	609		316		293		1,198		283		336		288		291
Total Bell	1,154		682		472		2,637		552		685		686		714
Bell Aliant	376		200		176		718		180		178		183		177
Telesat	-		-		-		157		12		47		60		38
Inter-segment eliminations	-		-		-		(44	)	(1	)	(8	)	(26	)	(9	)
Total BCE Inc.	1,530		882		648		3,468		743		902		903		920

Capital expenditures
Bell Wireline	868		479		389		1,960		620		483		457		400
Capital Intensity	*16.6*	%	*18.4*	%	14.8	%	18.5	%	22.9	%	18.4	%	17.3	%	15.2	%
Bell Wireless	171		104		67		455		143		91		80		141
Capital intensity	*7.9*	%	*9.3*	%	6.4	%	10.9	%	12.9	%	8.4	%	7.9	%	14.7	%
Total Bell	1,039		583		456		2,415		763		574		537		541
Capital Intensity	*14.1*	%	*15.8*	%	12.5	%	16.4	%	20.1	%	15.6	%	14.8	%	15.2	%
Bell Aliant	222		127		95		543		144		140		144		115
Telesat	-		-		-		188		10		50		63		65
Total BCE Inc.	1,261		710		551		3,146		917		764		744		721
Capital Intensity	*14.3*	%	*16.1*	%	12.6	%	17.7	%	20.2	%	17.0	%	16.8	%	16.5	%

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

Bell Wireline ⁽²⁾

	Q2		Q2				YTD		YTD
($ millions, except where otherwise indicated) (unaudited)	2008		2007		% change		2008		2007		% change
Bell Wireline
Local & access	845		918		(8.0	%)	1,702		1,835		(7.2	%)
Long distance	298		307		(2.9	%)	596		617		(3.4	%)
Data	900		867		3.8	%	1,807		1,747		3.4	%
Video	356		322		10.6	%	712		636		11.9	%
Equipment & other	153		184		(16.8	%)	317		346		(8.4	%)
Total external revenues	2,552		2,598		(1.8	%)	5,134		5,181		(0.9	%)
Inter-segment revenues	48		43		11.6	%	95		85		11.8	%
Total Bell Wireline operating revenue	2,600		2,641		(1.6	%)	5,229		5,266		(0.7	%)
Operating expenses	(1,637	)	(1,641	)	0.2	%	(3,256	)	(3,288	)	1.0	%
EBITDA	963		1,000		(3.7	%)	1,973		1,978		(0.3	%)
EBITDA Margin	*37.0*	%	37.9	%	(0.9	) pts	*37.7*	%	37.6	%	0.1	pts
Operating income	366		398		(8.0	%)	545		821		(33.6	%)
Capital expenditures	479		457		(4.8	%)	868		857		(1.3	%)
Capital intensity	18.4	%	17.3	%	(1.1	) pts	16.6	%	16.3	%	(0.3	) pts

Local
Network access services (NAS) (k)
Residential ^(A)	4,375		4,871		(10.2	%)	4,375		4,871		(10.2	%)
Business ^(B) (C)	3,233		3,653		(11.5	%)	3,233		3,653		(11.5	%)
Total	7,608		8,524		(10.7	%)	7,608		8,524		(10.7	%)
Network access service net activations/(losses) (k)
Residential	(125	)	(159	)	21.4	%	(231	)	(290	)	20.3	%
Business ^(B) (C)	(7	)	45		n.m.		(20	)	69		n.m.
Total	(132	)	(114	)	(15.8	%)	(251	)	(221	)	(13.6	%)
ADJUSTED ^(D)
Network access services (k)
Residential ^(D)	4,375		4,827		(9.4	%)	4,375		4,827		(9.4	%)
Business ^(D)	3,233		3,288		(1.7	%)	3,233		3,288		(1.7	%)
Total	7,608		8,115		(6.2	%)	7,608		8,115		(6.2	%)
Network access service net activations/(losses) (k)
Residential	(125	)	(159	)	21.4	%	(231	)	(290	)	20.3	%
Business ^(E)	(7	)	(12	)	41.7	%	(20	)	(34	)	41.2	%
Total	(132	)	(171	)	22.8	%	(251	)	(324	)	22.5	%
Long Distance (LD)
Conversation minutes (M)	2,985		3,249		(8.1	%)	5,915		6,489		(8.8	%)
Average revenue per minute ($)	0.089		0.088		1.1	%	0.091		0.089		2.2	%
ISP
High Speed Internet net activations ^(F)(k)	(1	)	25		n.m.		9		66		(86.4	%)
High Speed Internet subscribers EOP^(G)(k)	2,013		1,946		3.4	%	2,013		1,946		3.4	%
Video (DTH and VDSL)
Video EBITDA	47		68		(30.9	%)	124		123		0.8	%
Net subscriber activations (k)	8		(7	)	n.m.		9		(3	)	n.m.
Total subscribers EOP (k)	1,831		1,817		0.8	%	1,831		1,817		0.8	%
ARPU ⁽⁶⁾($/month)	64		58		10.3	%	65		58		12.1	%
Churn ⁽⁷⁾(%) (average per month)	1.1	%	1.3	%	0.2	pts	1.1	%	1.2	%	0.1	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 2007 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 – Second Quarter 2008 Page 6

Bell Wireline - Historical Trend

	YTD						Total
($ millions, except where otherwise indicated) (unaudited)	2008		Q2 08		Q1 08		2007		Q4 07		Q3 07		Q2 07		Q1 07
Bell Wireline
Local & access	1,702		845		857		3,617		882		900		918		917
Long distance	596		298		298		1,219		296		306		307		310
Data	1,807		900		907		3,591		962		882		867		880
Video	712		356		356		1,317		351		330		322		314
Equipment & other	317		153		164		683		175		162		184		162
Total external revenues	5,134		2,552		2,582		10,427		2,666		2,580		2,598		2,583
Inter-segment revenues	95		48		47		180		47		48		43		42
Total Bell Wireline operating revenue	5,229		2,600		2,629		10,607		2,713		2,628		2,641		2,625
Operating expenses	(3,256	)	(1,637	)	(1,619	)	(6,741	)	(1,768	)	(1,685	)	(1,641	)	(1,647	)
EBITDA	1,973		963		1,010		3,866		945		943		1,000		978
EBITDA Margin	*37.7*	%	*37.0*	%	38.4	%	36.4	%	34.8	%	35.9	%	37.9	%	37.3	%
Operating income	545		366		179		1,439		269		349		398		423
Capital expenditures	868		479		389		1,960		620		483		457		400
Capital intensity	16.6	%	18.4	%	14.8	%	18.5	%	22.9	%	18.4	%	17.3	%	15.2	%
Local
Network access services (NAS) (k)
Residential ^(A)	4,375		4,375		4,500		4,650		4,650		4,767		4,871		5,030
Business ^{(B) (C)}	3,233		3,233		3,240		3,526		3,526		3,606		3,653		3,608
Total	7,608		7,608		7,740		8,176		8,176		8,373		8,524		8,638
Network access service net activations/(losses) (k)
Residential	(231	)	(125	)	(106	)	(511	)	(117	)	(104	)	(159	)	(131	)
Business ^{(B) (C)}	(20	)	(7	)	(13	)	-		(80	)	11		45		24
Total	(251	)	(132	)	(119	)	(511	)	(197	)	(93	)	(114	)	(107	)
ADJUSTED ^(D)
Network access services (k)
Residential ^(D)	4,375		4,375		4,500		4,606		4,606		4,723		4,827		4,986
Business ^(D)	3,233		3,233		3,240		3,253		3,253		3,275		3,288		3,300
Total	7,608		7,608		7,740		7,859		7,859		7,998		8,115		8,286
Network access service net activations/(losses) (k)
Residential	(231	)	(125	)	(106	)	(511	)	(117	)	(104	)	(159	)	(131	)
Business ^(E)	(20	)	(7	)	(13	)	(69	)	(22	)	(13	)	(12	)	(22	)
Total	(251	)	(132	)	(119	)	(580	)	(139	)	(117	)	(171	)	(153	)
Long Distance (LD)
Conversation minutes (M)	5,915		2,985		2,930		12,500		3,049		2,962		3,249		3,240
Average revenue per minute ($)	0.091		0.089		0.093		0.091		0.089		0.097		0.088		0.090
ISP
High Speed Internet net activations ^(F)(k)	9		(1	)	10		124		29		29		25		41
High Speed Internet subscribers EOP ^(G)(k)	2,013		2,013		2,014		2,004		2,004		1,975		1,946		1,932
Video (DTH and VDSL)
Video EBITDA	124		47		77		265		77		65		68		55
Net subscriber activations (k)	9		8		1		2		2		3		(7	)	4
Total subscribers EOP (k)	1,831		1,831		1,823		1,822		1,822		1,820		1,817		1,824
ARPU ($/month)	65		64		65		60		64		60		58		57
Churn (%) (average per month)	1.1	%	1.1	%	1.1	%	1.2	%	1.3	%	1.3	%	1.3	%	1.1	%


(A)	At the beginning of Q1 2008, an adjustment of 44k was made to our NAS count, reflecting an extensive review of our historical customer account records.
(B)	In Q1 2008, we adjusted our beginning-of-period business NAS customer base to write-off 273k lines following formal notification received from a major wholesale customer in Q4 2007 that it was in the process of migrating all of its subscribers onto its own network facilities.
(C)	The Q3 2007 opening business network access services subscriber base was decreased by 58k to adjust for an overstatement arising from past methodology for calculating local inter-connections.
(D)	NAS has been adjusted for 2007 to reflect notes A and B above.
(E)	NAS net activations/(losses) throughout 2007 have been adjusted to reflect 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 – Second Quarter 2008 Page 7

Bell Wireless ⁽²⁾

	Q2		Q2				YTD		YTD
($ millions, except where otherwise indicated) (unaudited)	2008		2007		% change		2008		2007		% change
Bell Wireless
Revenue
Network	1,006		923		9.0	%	1,961		1,812		8.2	%
Equipment	102		75		36.0	%	176		132		33.3	%
Total external Bell Wireless revenues	1,108		998		11.0	%	2,137		1,944		9.9	%
Inter-segment	13		15		(13.3	%)	25		27		(7.4	%)
Total Bell Wireless operating revenues	1,121		1,013		10.7	%	2,162		1,971		9.7	%
Operating expenses	(679	)	(614	)	(10.6	%)	(1,310	)	(1,169	)	(12.1	%)
EBITDA	442		399		10.8	%	852		802		6.2	%
EBITDA margin (Total revenues)	*39.4*	%	39.4	%	0.0	pt	*39.4*	%	40.7	%	(1.3	) pts
EBITDA margin (Network revenues)	*43.9*	%	43.2	%	0.7	pts	*43.4*	%	44.3	%	(0.9	) pts
Operating Income	316		288		9.7	%	609		579		5.2	%

Capital expenditures	104		80		(30.0	%)	171		221		22.6	%
Capital intensity	9.3	%	7.9	%	(1.4	) pts	7.9	%	11.2	%	3.3	pts

Wireless gross activations ^(A)(k)	391		389		0.5	%	742		685		8.3	%
Post-paid	253		228		11.0	%	451		395		14.2	%
Wireless net activations ^(A)(k)	83		63		31.7	%	117		76		53.9	%
Post-paid	111		43		n.m.		139		53		n.m.
Wireless subscribers EOP ^{(A) (B) (C)} (k)	6,332		5,884		7.6	%	6,332		5,884		7.6	%
Post-paid	4,595		4,297		6.9	%	4,595		4,297		6.9	%
Average revenue per unit (ARPU) ^(D)($/month)	54		54		0.0	%	53		53		0.0	%
Pre-paid	17		17		0.0	%	17		16		6.3	%
Post-paid	66		65		1.5	%	65		64		1.6	%
Churn (%) ^(D)(average per month)	1.6	%	1.8	%	0.2	pts	1.6	%	1.7	%	0.1	pts
Pre-paid	3.0	%	3.1	%	0.1	pts	2.9	%	3.0	%	0.1	pts
Post-paid	1.1	%	1.4	%	0.3	pts	1.2	%	1.3	%	0.1	pts
Usage per subscriber ^(D)(min/month)	305		289		5.5	%	293		277		5.8	%
Cost of acquisition (COA) ^{(D) (8)}($/sub)	417		442		5.7	%	407		433		6.0	%
Paging subscribers (k)	210		250		(16.0	%)	210		250		(16.0	%)
Paging average revenue per unit ($/month)	11		11		0.0	%	11		11		0.0	%

(A)	Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)	The Q1 2007 beginning of year wireless subscriber base was decreased by 146k as a result of a change to our prepaid deactivation policy.
(C)	The Q2 2008 beginning of period wireless subscriber base was decreased by 1k (postpaid increased by 6k while pre-paid decreased by 7k) as a result of the integration of Aliant Mobility’s billing system.
(D)	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 – Second Quarter 2008 Page 8

Bell Wireless - Historical Trend

	YTD						Total
($ millions, except where otherwise indicated) (unaudited)	2008		Q2 08		Q1 08		2007		Q4 07		Q3 07		Q2 07		Q1 07
Bell Wireless
Revenue
Network	1,961		1,006		955		3,768		979		977		923		889
Equipment	176		102		74		332		112		88		75		57
Total external Bell Wireless revenues	2,137		1,108		1,029		4,100		1,091		1,065		998		946
Inter-segment	25		13		12		58		17		14		15		12
Total Bell Wireless operating revenues	2,162		1,121		1,041		4,158		1,108		1,079		1,013		958
Operating expenses	(1,310	)	(679	)	(631	)	(2,518	)	(717	)	(632	)	(614	)	(555	)
EBITDA	852		442		410		1,640		391		447		399		403
EBITDA margin (Total revenues)	*39.4*	%	*39.4*	%	39.4	%	39.4	%	35.3	%	41.4	%	39.4	%	42.1	%
EBITDA margin (Network revenues)	*43.4*	%	*43.9*	%	42.9	%	43.5	%	39.9	%	45.8	%	43.2	%	45.3	%
Operating Income	609		316		293		1,198		283		336		288		291

Capital expenditures	171		104		67		455		143		91		80		141
Capital intensity	7.9	%	9.3	%	6.4	%	10.9	%	12.9	%	8.4	%	7.9	%	14.7	%

Wireless gross activations ^(A)(k)	742		391		351		1,640		510		445		389		296
Post-paid	451		253		198		910		261		254		228		167
Wireless net activations ^(A)(k)	117		83		34		408		195		137		63		13
Post-paid	139		111		28		206		77		76		43		10
Wireless subscribers EOP^{(A) (B) (C)} (k)	6,332		6,332		6,250		6,216		6,216		6,021		5,884		5,821
Post-paid	4,595		4,595		4,478		4,450		4,450		4,373		4,297		4,254
Average revenue per unit (ARPU) ^(D)($/month)	53		54		52		54		55		56		54		52
Pre-paid	17		17		17		17		18		19		17		15
Post-paid	65		66		64		66		67		68		65		64
Churn (%) ^(D)(average per month)	1.6	%	1.6	%	1.6	%	1.7	%	1.7	%	1.7	%	1.8	%	1.6	%
Pre-paid	2.9	%	3.0	%	2.8	%	2.8	%	2.7	%	2.7	%	3.1	%	2.9	%
Post-paid	1.2	%	1.1	%	1.3	%	1.3	%	1.4	%	1.4	%	1.4	%	1.2	%
Usage per subscriber ^(D)(min/month)	293		305		281		288		299		297		289		266
Cost of acquisition (COA) ^(D)($/sub)	407		417		396		404		392		371		442		420

Paging subscribers (k)	210		210		216		222		222		236		250		262
Paging average revenue per unit ($/month)	11		11		11		11		11		11		11		10

(A)	Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)	The Q1 2007 beginning of year wireless subscriber base was decreased by 146k as a result of a change to our prepaid deactivation policy.
(C)	The Q2 2008 beginning of period wireless subscriber base was decreased by 1k (postpaid increased by 6k while pre-paid decreased by 7k) as a result of the integration of Aliant Mobility’s billing system.
(D)	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 – Second Quarter 2008 Page 9

BCE Inc.
Net debt and other information ⁽²⁾

BCE Inc. - Net debt and preferreds

At June 30, 2008	BCE Inc.
(unaudited)
($ millions, except where otherwise indicated)
			Bell		Inter-segment
	Bell		Aliant		eliminations	BCE Inc.
Cash and cash equivalents	(2,672	)	(9	)	-	(2,681	)
Debt due within one year	1,055		239		-	1,294
Long-term debt	7,381		2,555		-	9,936
Net debt	5,764		2,785		-	8,549
Preferred shares - BCE	2,770		-		-	2,770
Net debt and preferreds	8,534		2,785		-	11,319

Bell - Balance Sheet Information
(unaudited)
($ millions, except where otherwise indicated)	June 30		March 31		Dec. 31
	2008		2008		2007
Net Debt
Long-term debt	7,381		8,116		8,116
Debt due within one year	1,055		393		440
Less: Cash and cash equivalents	(2,672	)	(2,471	)	(2,608	)
Total Net Debt	5,764		6,038		5,948
Non-controlling interest	80		65		64
Total shareholders’ equity	19,948		19,639		19,606
Total Capitalization	25,792		25,742		25,618

Net Debt: Total Capitalization	22.3	%	23.5	%	23.2	%
Net Debt: Trailing 12 month EBITDA	1.04		1.09		1.08
EBITDA: Interest (trailing 12 month)	8.31		7.94		7.65

BCE Inc. - Cash Flow Information
(unaudited)	Q2		Q2						YTD		YTD
($ millions, except where otherwise indicated)	2008		2007		$ change		% change		2008		2007		$ change		% change

Free Cash Flow (FCF) ⁽³⁾
Cash from operating activities	1,188		967		221		22.9	%	1,898		1,620		278		17.2	%
Capital expenditures	(583	)	(537	)	(46	)	(8.6	%)	(1,039	)	(1,078	)	39		3.6	%
Dividends and distributions	(326	)	(339	)	13		3.8	%	(654	)	(653	)	(1	)	(0.2	%)
Other investing activities	2		(2	)	4		n.m.		3		(1	)	4		n.m.
BELL FCF	281		89		192		n.m.		208		(112	)	320		n.m.
Bell Aliant FCF	129		182		(53	)	(29.1	%)	125		232		(107	)	(46.1	%)
Telesat FCF	-		(5	)	5		n.m.		-		(2	)	2		n.m.
Inter-segment eliminations	-		(29	)	29		n.m.		-		(41	)	41		n.m.
Total BCE FCF	410		237		173		73.0	%	333		77		256		n.m.

BCE Inc. - Cash Flow Information - Historical Trend
(unaudited)	YTD		Q2		Q1		Total
*($ millions, except where otherwise indicated)*	2008		2008		2008		2007		Q4 07		Q3 07		Q2 07		Q1 07
Free Cash Flow (FCF)
Cash from operating activities	1,898		1,188		710		4,205		1,357		1,228		967		653
Capital expenditures	(1,039	)	(583	)	(456	)	(2,415	)	(763	)	(574	)	(537	)	(541	)
Dividends and distributions	(654	)	(326	)	(328	)	(1,306	)	(327	)	(326	)	(339	)	(314	)
Other investing activities	3		2		1		11		7		5		(2	)	1
BELL FCF	208		281		(73	)	495		274		333		89		(201	)
Bell Aliant FCF	125		129		(4	)	399		104		63		182		50
Telesat FCF	-		-		-		51		22		31		(5	)	3
Inter-segment eliminations	-		-		-		(53	)	(7	)	(5	)	(29	)	(12	)
Total BCE FCF	333		410		(77	)	892		393		422		237		(160	)

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

BCE Inc.
Consolidated Balance Sheet Data

	June 30		March 31		December 31
($ millions, except where otherwise indicated) (unaudited)	2008		2008		2007
*ASSETS*
Current assets
Cash and cash equivalents	2,681		2,481		2,656
Accounts receivable	1,980		1,998		1,927
Future income taxes	51		95		71
Inventory	342		279		264
Prepaid and other expenses	440		438		277
Current assets of discontinued operations	11		16		17
Total current assets	5,505		5,307		5,212
Capital assets
Property, plant and equipment	18,357		18,384		18,597
Finite-life intangible assets	2,658		2,663		2,480
Indefinite-life intangible assets	2,954		2,954		2,913
Total capital assets	23,969		24,001		23,990
Other long-term assets	2,734		2,898		2,952
Goodwill	5,728		5,698		5,865
Non-current assets of discontinued operations	40		62		62
Total assets	37,976		37,966		38,081
*LIABILITIES*
Current liabilities
Accounts payable and accrued liabilities	2,929		2,762		3,278
Interest payable	139		172		145
Dividends payable	43		337		337
Debt due within one year	1,294		737		717
Current liabilities of discontinued operations	12		12		15
Total current liabilities	4,417		4,020		4,492
Long-term debt	9,936		10,622		10,621
Other long-term liabilities	4,963		4,988		4,632
Non-current liabilities of discontinued operations	1		1		1
Total liabilities	19,317		19,631		19,746
Non-controlling interest	1,103		1,087		1,103
*SHAREHOLDERS’ EQUITY*
Preferred shares	2,770		2,770		2,770
Common shareholders’ equity
Common shares	13,553		13,537		13,536
Contributed surplus	2,538		2,538		2,537
Accumulated other comprehensive income	48		118		68
Deficit	(1,353	)	(1,715	)	(1,679	)
Total common shareholders’ equity	14,786		14,478		14,462
Total shareholders’ equity	17,556		17,248		17,232
Total liabilities and shareholders’ equity	37,976		37,966		38,081
Number of common shares outstanding	805.8		805.3		805.3

Total Net Debt	8,549		8,878		8,682
Total Capitalization	27,208		27,213		27,017

Key ratios
Net debt : Total Capitalization	31.4	%	32.6	%	32.1	%
Net debt : Trailing 12 month EBITDA	1.23		1.27		1.24
EBITDA : Interest (trailing 12 month)	8.53		8.30		8.13

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

BCE Inc.
Consolidated Cash Flow Data

		Q2			Q2						YTD			YTD
($ millions, except where otherwise indicated) (unaudited)		2008			2007			$ change			2008			2007			$ change
Cash flows from operating activities
Net earnings		392			700			(308	)		681			1,229			(548	)
less: (Losses) earnings from discontinued operations, net of tax		(19	)		135			(154	)		(20	)		135			(155	)
Earnings from continuing operations		411			565			(154	)		701			1,094			(393	)
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities
Depreciation and amortization of intangible assets		788			805			(17	)		1,606			1,591			15
Net benefit plans cost		70			98			(28	)		141			200			(59	)
Restructuring and other		71			71			-			354			107			247
Losses (gains) on investments		-			2			(2	)		2			(119	)		121
Future income taxes		92			(110	)		202			25			1			24
Non-controlling interest		88			87			1			162			183			(21	)
Contributions to employee pension plans		(48	)		(79	)		31			(92	)		(187	)		95
Other employee future benefit plan payments		(24	)		(24	)		-			(47	)		(48	)		1
Payments of restructuring and other		(29	)		(19	)		(10	)		(53	)		(71	)		18
Operating assets and liabilities		115			17			98			(374	)		(373	)		(1	)
		1,534			1,413			121			2,425			2,378			47
Capital expenditures		(710	)		(744	)		34			(1,261	)		(1,465	)		204
Other investing activities		3			-			3			5			2			3
Cash dividends paid on preferred shares		(32	)		(33	)		1			(67	)		(56	)		(11	)
Cash dividends/distributions paid by subsidiaries to non-controlling interest		(92	)		(109	)		17			(182	)		(222	)		40
Free Cash Flow from operations, before common dividends		703			527			176			920			637			283
Cash dividends paid on common shares		(293	)		(290	)		(3	)		(587	)		(560	)		(27	)
Free Cash Flow from operations, after common dividends		410			237			173			333			77			256
Business acquisitions		(24	)		(2	)		(22	)		(55	)		(149	)		94
Business dispositions		-			-			-			(10	)		-			(10	)
Bell Aliant		-			(3	)		3			-			(7	)		7
Going-private costs		(8	)		-			(8	)		(17	)		-			(17	)
Increase in investments		(2	)		(3	)		1			(4	)		(16	)		12
Decrease in investments		1			6			(5	)		1			13			(12	)
Free Cash Flow after investments and divestitures		377			235			142			248			(82	)		330
Other financing activities
(Decrease) increase in notes payable and bank advances		(50	)		508			(558	)		15			823			(808	)
Issue of long-term debt		50			30			20			50			1,055			(1,005	)
Repayment of long-term debt		(182	)		(837	)		655			(284	)		(2,012	)		1,728
Issue of common shares		15			118			(103	)		16			132			(116	)
Repurchase of common shares		-			(4	)		4			-			(227	)		227
Redemption of equity securities by subsidiaries from non-controlling interest		-			(138	)		138			-			(212	)		212
Other financing activities		(10	)		(8	)		(2	)		(21	)		(48	)		27
		(177	)		(331	)		154			(224	)		(489	)		265
Cash flows from (used in) continuing operations		200			(96	)		296			24			(571	)		595
Cash flows (used in) from discontinued operations activities		-			(5	)		5			1			(1	)		2
Cash flows from (used in) discontinued investing activities		-			352			(352	)		(1	)		350			(351	)
Cash flows from discontinued financing activities		-			3			(3	)		-			6			(6	)
Net increase (decrease) in cash and cash equivalents		200			254			(54	)		24			(216	)		240
Cash and cash equivalents at beginning of period		2,482			111			2,371			2,658			581			2,077
Cash and cash equivalents at end of period		2,682			365			2,317			2,682			365			2,317
Consists of:
Cash and cash equivalents of continuing operations		2,681			362			2,319			2,681			362			2,319
Cash and cash equivalents of discontinued operations		1			3			(2	)		1			3			(2	)
Total		2,682			365			2,317			2,682			365			2,317

Other information
Cash flow per share ⁽⁹⁾	$	1.03		$	0.83		$	0.20		$	1.45		$	1.13		$	0.32
Annualized cash flow yield ⁽¹⁰⁾		9.8	%		6.5	%		3.3	pts		6.4	%		3.9	%		2.5	pts
Common dividend payout ⁽¹¹⁾		0.0	%		65.2	%		(65.2	) pts		33.2	%		67.6	%		(34.4	) pts

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

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

		YTD 2008									Total 2007
($ millions, except where otherwise indicated) (unaudited)		YTD 2008			Q2 08			Q1 08			Total 2007			Q4 07			Q3 07			Q2 07			Q1 07
Cash flows from operating activities
Net earnings		681			392			289			4,057			2,388			440			700			529
less: (Losses) earnings from discontinued operations, net of tax		(20	)		(19	)		(1	)		110			(20	)		(5	)		135			-
Earnings from continuing operations		701			411			290			3,947			2,408			445			565			529
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities
Depreciation and amortization of intangible assets		1,606			788			818			3,186			783			812			805			786
Net benefit plans cost		141			70			71			410			113			97			98			102
Restructuring and other		354			71			283			331			146			78			71			36
Losses (gains) on investments		2			-			2			(2,414	)		(2,289	)		(6	)		2			(121	)
Future income taxes		25			92			(67	)		411			195			215			(110	)		111
Non-controlling interest		162			88			74			333			66			84			87			96
Contributions to employee pension plans		(92	)		(48	)		(44	)		(265	)		(36	)		(42	)		(79	)		(108	)
Other employee future benefit plan payments		(47	)		(24	)		(23	)		(96	)		(25	)		(23	)		(24	)		(24	)
Payments of restructuring and other		(53	)		(29	)		(24	)		(118	)		(27	)		(20	)		(19	)		(52	)
Operating assets and liabilities		(374	)		115			(489	)		(25	)		385			(37	)		17			(390	)
		2,425			1,534			891			5,700			1,719			1,603			1,413			965
Capital expenditures		(1,261	)		(710	)		(551	)		(3,146	)		(917	)		(764	)		(744	)		(721	)
Other investing activities		5			3			2			13			7			4			-			2
Cash dividends paid on preferred shares		(67	)		(32	)		(35	)		(124	)		(34	)		(34	)		(33	)		(23	)
Cash dividends/distributions paid by subsidiaries to non-controlling interest		(182	)		(92	)		(90	)		(404	)		(88	)		(94	)		(109	)		(113	)
Free Cash Flow from operations, before common dividends		920			703			217			2,039			687			715			527			110
Cash dividends paid on common shares		(587	)		(293	)		(294	)		(1,147	)		(294	)		(293	)		(290	)		(270	)
Free Cash Flow from (used in) operations, after common dividends		333			410			(77	)		892			393			422			237			(160	)
Business acquisitions		(55	)		(24	)		(31	)		(163	)		-			(14	)		(2	)		(147	)
Business dispositions		(10	)		-			(10	)		3,123			3,123			-			-			-
Bell Aliant		-			-			-			(7	)		-			-			(3	)		(4	)
Going-private costs		(17	)		(8	)		(9	)		(49	)		(13	)		(36	)		-			-
Increase in investments		(4	)		(2	)		(2	)		(27	)		(6	)		(5	)		(3	)		(13	)
Decrease in investments		1			1			-			192			129			50			6			7
Free Cash Flow after investments and divestitures		248			377			(129	)		3,961			3,626			417			235			(317	)
Other financing activities
Increase (decrease) in notes payable and bank advances		15			(50	)		65			211			(267	)		(345	)		508			315
Issue of long-term debt		50			50			-			1,071			-			16			30			1,025
Repayment of long-term debt		(284	)		(182	)		(102	)		(3,048	)		(947	)		(89	)		(837	)		(1,175	)
Issue of common shares		16			15			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		(21	)		(10	)		(11	)		(66	)		(13	)		(5	)		(8	)		(40	)
		(224	)		(177	)		(47	)		(2,239	)		(1,226	)		(524	)		(331	)		(158	)
Cash flows from (used in) continuing operations		24			200			(176	)		1,722			2,400			(107	)		(96	)		(475	)
Cash flows from (used in) discontinued operations activities		1			-			1			(9	)		(5	)		(3	)		(5	)		4
Cash flows (used in) from discontinued investing activities		(1	)		-			(1	)		348			(3	)		1			352			(2	)
Cash flows from discontinued financing activities		-			-			-			16			7			3			3			3
Net increase (decrease) in cash and cash equivalents		24			200			(176	)		2,077			2,399			(106	)		254			(470	)
Cash and cash equivalents at beginning of period		2,658			2,482			2,658			581			259			365			111			581
Cash and cash equivalents at end of period		2,682			2,682			2,482			2,658			2,658			259			365			111
Consists of:
Cash and cash equivalents of continuing operations		2,681			2,681			2,481			2,656			2,656			257			362			103
Cash and cash equivalents of discontinued operations		1			1			1			2			2			2			3			8
Total		2,682			2,682			2,482			2,658			2,658			259			365			111

Other information
Cash flow per share	$	1.45		$	1.03		$	0.42		$	3.17		$	1.00		$	1.04		$	0.83		$	0.30
Annualized cash flow yield		6.4	%		9.8	%		3.1	%		6.4	%		8.6	%		8.9	%		6.5	%		1.7	%
Common dividend payout		33.2	%		0.0	%		64.0	%		62.4	%		50.7	%		67.6	%		65.2	%		70.2	%

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

Accompanying Notes

(1)

Throughout this report, BCE means BCE Inc., its subsidiaries and joint ventures; Bell means our Bell Wireline and Bell Wireless segments on an aggregate basis; and Bell Aliant means Bell Aliant Regional Communications Income Fund and its affiliated entities. We have reclassified some of the amounts for the previous periods in the consolidated financial statements to make them consistent with the presentation for the current period. We have restated financial information for the previous periods to reflect our decisions in 2008 to cease operations and to sell certain of our businesses. They are now shown as discontinued operations. Telesat Canada (Telesat) was sold on October 31, 2007 and we have continuing commercial arrangements between Telesat and Bell Express Vu Limited Partnership (Bell 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 – Second 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 by other companies. We consider free cash flow to be an important indicator of the financial strength and performance of our business because it shows how much cash is available to repay debt and to reinvest in our company. We present free cash flow on a consistent basis from period to period, which allows us to compare our financial performance on a consistent basis. 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 – Second Quarter 2008 Page 15