BCE Inc. Supplementary Financial Information

EX-99.3 4 supp_q210.htm SUPPLEMENTARY FINANCIAL INFORMATION - SECOND QUARTER 2010 BCE Inc. Supplementary Financial Information – Second Quarter 2010

EXHIBIT 99.3

BCE Inc. ⁽¹⁾
Consolidated Operational Data

($ millions, except per share amounts) (unaudited)		Q2 2010			Q2 2009			$ change		% change			YTD 2010			YTD 2009			$ change		% change
Operating revenues		4,438			4,297			141		3.3	%		8,870			8,628			242		2.8	%
Cost of revenue, exclusive of depreciation and amortization		(1,156	)		(1,029	)		(127	)	(12.3	%)		(2,330	)		(2,115	)		(215	)	(10.2	%)
Selling, general and administrative expenses ^(A)		(1,388	)		(1,389	)		1		0.1	%		(2,834	)		(2,786	)		(48	)	(1.7	%)
Net benefit plans cost		(66	)		(88	)		22		25.0	%		(94	)		(176	)		82		46.6	%
EBITDA ⁽³⁾		1,828			1,791			37		2.1	%		3,612			3,551			61		1.7	%
EBITDA margin ⁽⁴⁾		*41.2*	%		41.7	%				(0.5	) pts		*40.7*	%		41.2	%				(0.5	) pts
Depreciation		(630	)		(630	)		-		0.0	%		(1,240	)		(1,255	)		15		1.2	%
Amortization of intangible assets		(185	)		(191	)		6		3.1	%		(368	)		(384	)		16		4.2	%
Restructuring and other		(8	)		(146	)		138		94.5	%		(37	)		(254	)		217		85.4	%
Operating income		1,005			824			181		22.0	%		1,967			1,658			309		18.6	%
Other income (expense)		20			(23	)		43		n.m.			140			(22	)		162		n.m.
Interest expense		(166	)		(179	)		13		7.3	%		(331	)		(370	)		39		10.5	%
Pre-tax earnings from continuing operations		859			622			237		38.1	%		1,776			1,266			510		40.3	%
Income tax expense		(159	)		(166	)		7		4.2	%		(363	)		(314	)		(49	)	(15.6	%)
Non-controlling interest		(83	)		(80	)		(3	)	(3.8	%)		(159	)		(164	)		5		3.0	%
Earnings from continuing operations		617			376			241		64.1	%		1,254			788			466		59.1	%
Discontinued operations		-			(4	)		4		100.0	%		-			(10	)		10		100.0	%
Net earnings		617			372			245		65.9	%		1,254			778			476		61.2	%
Dividends on preferred shares		(27	)		(26	)		(1	)	(3.8	%)		(56	)		(55	)		(1	)	(1.8	%)
Net earnings applicable to common shares		590			346			244		70.5	%		1,198			723			475		65.7	%
Net earnings per common share – basic
Continuing operations	$	0.78		$	0.45		$	0.33		73.3	%	$	1.57		$	0.94		$	0.63		67.0	%
Discontinued operations	$	-		$	-		$	-		0.0	%	$	-		$	(0.01	)	$	0.01		100.0	%
Net earnings	$	0.78		$	0.45		$	0.33		73.3	%	$	1.57		$	0.93		$	0.64		68.8	%
Net earnings per common share – diluted
Continuing operations	$	0.78		$	0.45		$	0.33		73.3	%	$	1.57		$	0.94		$	0.63		67.0	%
Discontinued operations	$	-		$	-		$	-		0.0	%	$	-		$	(0.01	)	$	0.01		100.0	%
Net earnings	$	0.78		$	0.45		$	0.33		73.3	%	$	1.57		$	0.93		$	0.64		68.8	%
Dividends per common share	$	0.435		$	0.385		$	0.050		13.0	%	$	0.870		$	0.770		$	0.100		13.0	%
Average number of common shares outstanding – basic (millions)		759.7			769.0								762.6			778.6
Average number of common shares outstanding – diluted (millions)		760.1			769.0								762.9			778.6

The following items are included in net earnings:
Net gains (losses) on investments
Continuing operations		8			-			8		n.m.			133			1			132		n.m.
Discontinued operations		-			(3	)		3		100.0	%		-			(3	)		3		100.0	%
Restructuring and other		1			(98	)		99		n.m.			(16	)		(168	)		152		90.5	%
Total		9			(101	)		110		n.m.			117			(170	)		287		n.m.
Impact on net earnings per share	$	0.01		$	(0.13	)	$	0.14		n.m.		$	0.15		$	(0.22	)	$	0.37		n.m.
Adjusted EPS ⁽³⁾	$	0.77		$	0.58		$	0.19		32.8	%	$	1.42		$	1.15		$	0.27		23.5	%

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

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 2

BCE Inc.
Consolidated Operational Data – Historical Trend

		YTD									Total
($ millions, except per share amounts) (unaudited)		2010			Q2 10			Q1 10			2009			Q4 09			Q3 09			Q2 09			Q1 09
Operating revenues		8,870			4,438			4,432			17,735			4,650			4,457			4,297			4,331
Cost of revenue, exclusive of depreciation and amortization		(2,330	)		(1,156	)		(1,174	)		(4,525	)		(1,258	)		(1,152	)		(1,029	)		(1,086	)
Selling, general and administrative expenses ^(A)		(2,834	)		(1,388	)		(1,446	)		(5,766	)		(1,562	)		(1,418	)		(1,389	)		(1,397	)
Net benefit plans cost		(94	)		(66	)		(28	)		(355	)		(93	)		(86	)		(88	)		(88	)
EBITDA		3,612			1,828			1,784			7,089			1,737			1,801			1,791			1,760
*EBITDA margin*		*40.7*	%		*41.2*	%		40.3	%		40.0	%		37.4	%		40.4	%		41.7	%		40.6	%
Depreciation		(1,240	)		(630	)		(610	)		(2,595	)		(704	)		(636	)		(630	)		(625	)
Amortization of intangible assets		(368	)		(185	)		(183	)		(776	)		(200	)		(192	)		(191	)		(193	)
Restructuring and other		(37	)		(8	)		(29	)		(527	)		(82	)		(191	)		(146	)		(108	)
Operating income		1,967			1,005			962			3,191			751			782			824			834
Other income (expense)		140			20			120			(18	)		28			(24	)		(23	)		1
Interest expense		(331	)		(166	)		(165	)		(723	)		(182	)		(171	)		(179	)		(191	)
Pre-tax earnings from continuing operations		1,776			859			917			2,450			597			587			622			644
Income tax (expense) recovery		(363	)		(159	)		(204	)		(368	)		(141	)		87			(166	)		(148	)
Non-controlling interest		(159	)		(83	)		(76	)		(333	)		(79	)		(90	)		(80	)		(84	)
Earnings from continuing operations		1,254			617			637			1,749			377			584			376			412
Discontinued operations		-			-			-			(11	)		(1	)		-			(4	)		(6	)
Net earnings		1,254			617			637			1,738			376			584			372			406
Dividends on preferred shares		(56	)		(27	)		(29	)		(107	)		(26	)		(26	)		(26	)		(29	)
Net earnings applicable to common shares		1,198			590			608			1,631			350			558			346			377
Net earnings per common share – basic
Continuing operations	$	1.57		$	0.78		$	0.79		$	2.12		$	0.46		$	0.72		$	0.45		$	0.49
Discontinued operations	$	-		$	-		$	-		$	(0.01	)	$	-		$	-		$	-		$	(0.01	)
Net earnings	$	1.57		$	0.78		$	0.79		$	2.11		$	0.46		$	0.72		$	0.45		$	0.48
Net earnings per common share – diluted
Continuing operations	$	1.57		$	0.78		$	0.79		$	2.12		$	0.46		$	0.72		$	0.45		$	0.49
Discontinued operations	$	-		$	-		$	-		$	(0.01	)	$	-		$	-		$	-		$	(0.01	)
Net earnings	$	1.57		$	0.78		$	0.79		$	2.11		$	0.46		$	0.72		$	0.45		$	0.48
Dividends per common share	$	0.870		$	0.435		$	0.435		$	1.580		$	0.405		$	0.405		$	0.385		$	0.385
Average number of common shares outstanding – basic (millions)		762.6			759.7			765.7			772.9			767.2			767.2			769.0			788.3
Average number of common shares outstanding – diluted (millions)		762.9			760.1			766.0			772.9			767.3			767.2			769.0			788.3

The following items are included in net earnings:
Net gains (losses) on investments
Continuing operations		133			8			125			48			11			36			-			1
Discontinued operations		-			-			-			(7	)		-			(4	)		(3	)		-
Restructuring and other		(16	)		1			(17	)		(339	)		(48	)		(123	)		(98	)		(70	)
Total		117			9			108			(298	)		(37	)		(91	)		(101	)		(69	)
Impact on net earnings per share	$	0.15		$	0.01		$	0.14		$	(0.39	)	$	(0.05	)	$	(0.12	)	$	(0.13	)	$	(0.09	)
Adjusted EPS	$	1.42		$	0.77		$	0.65		$	2.50		$	0.51		$	0.84		$	0.58		$	0.57

^(A)Excludes net benefit plans cost

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 3

BCE Inc.
Segmented Data ⁽²⁾

	Q2		Q2						YTD		YTD
($ millions, except where otherwise indicated) (unaudited)	2010		2009		$ change		% change		2010		2009		$ change		% change

Revenues
Bell Wireline	2,632		2,575		57		2.2	%	5,290		5,167		123		2.4	%
Bell Wireless	1,210		1,104		106		9.6	%	2,363		2,182		181		8.3	%
Inter-segment eliminations	(50	)	(51	)	1		2.0	%	(103	)	(99	)	(4	)	(4.0	%)
Total Bell	3,792		3,628		164		4.5	%	7,550		7,250		300		4.1	%
Bell Aliant	753		785		(32	)	(4.1	%)	1,532		1,603		(71	)	(4.4	%)
Inter-segment eliminations	(107	)	(116	)	9		7.8	%	(212	)	(225	)	13		5.8	%
Total BCE Inc.	4,438		4,297		141		3.3	%	8,870		8,628		242		2.8	%

EBITDA
Bell Wireline	1,041		982		59		6.0	%	2,084		1,974		110		5.6	%
Margin	*39.6*	%	38.1	%			1.5	pts	*39.4*	%	38.2	%			1.2	pts
Bell Wireless	457		468		(11	)	(2.4	%)	869		902		(33	)	(3.7	%)
Margin	*37.8*	%	42.4	%			(4.6	) pts	*36.8*	%	41.3	%			(4.5	) pts
Total Bell	1,498		1,450		48		3.3	%	2,953		2,876		77		2.7	%
Margin	*39.5*	%	40.0	%			(0.5	) pts	*39.1*	%	39.7	%			(0.6	) pts
Bell Aliant	330		341		(11	)	(3.2	%)	659		675		(16	)	(2.4	%)
Margin	*43.8*	%	43.4	%			0.4	pts	*43.0*	%	42.1	%			0.9	pts
Total BCE Inc.	1,828		1,791		37		2.1	%	3,612		3,551		61		1.7	%
Margin	*41.2*	%	41.7	%			(0.5	) pts	*40.7*	%	41.2	%			(0.5	) pts
Operating income
Bell Wireline	501		290		211		72.8	%	1,017		639		378		59.2	%
Bell Wireless	319		338		(19	)	(5.6	%)	590		638		(48	)	(7.5	%)
Total Bell	820		628		192		30.6	%	1,607		1,277		330		25.8	%
Bell Aliant	185		196		(11	)	(5.6	%)	360		381		(21	)	(5.5	%)
Total BCE Inc.	1,005		824		181		22.0	%	1,967		1,658		309		18.6	%

Capital expenditures
Bell Wireline	455		455		-		0.0	%	834		807		(27	)	(3.3	%)
Capital Intensity ⁽⁵⁾	*17.3*	%	17.7	%			0.4	pts	*15.8*	%	15.6	%			(0.2	) pts
Bell Wireless	83		224		141		62.9	%	135		354		219		61.9	%
Capital Intensity	*6.9*	%	20.3	%			13.4	pts	*5.7*	%	16.2	%			10.5	pts
Total Bell	538		679		141		20.8	%	969		1,161		192		16.5	%
Capital Intensity	*14.2*	%	18.7	%			4.5	pts	*12.8*	%	16.0	%			3.2	pts
Bell Aliant	125		121		(4	)	(3.3	%)	220		229		9		3.9	%
Capital Intensity	*16.6*	%	15.4	%			(1.2	) pts	14.4	%	14.3	%			(0.1	) pts
Total BCE Inc.	663		800		137		17.1	%	1,189		1,390		201		14.5	%
Capital Intensity	*14.9*	%	18.6	%			3.7	pts	*13.4*	%	16.1	%			2.7	pts

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 4

BCE Inc.
Segmented Data – Historical Trend

	YTD						Total
($ millions, except where otherwise indicated) (unaudited)	2010		Q2 10		Q1 10		2009		Q4 09		Q3 09		Q2 09		Q1 09

Revenues
Bell Wireline	5,290		2,632		2,658		10,666		2,840		2,659		2,575		2,592
Bell Wireless	2,363		1,210		1,153		4,558		1,198		1,178		1,104		1,078
Inter-segment eliminations	(103	)	(50	)	(53	)	(204	)	(56	)	(49	)	(51	)	(48	)
Total Bell	7,550		3,792		3,758		15,020		3,982		3,788		3,628		3,622
Bell Aliant	1,532		753		779		3,174		785		786		785		818
Inter-segment eliminations	(212	)	(107	)	(105	)	(459	)	(117	)	(117	)	(116	)	(109	)
Total BCE Inc.	8,870		4,438		4,432		17,735		4,650		4,457		4,297		4,331

EBITDA
Bell Wireline	2,084		1,041		1,043		3,907		960		973		982		992
Margin	*39.4*	%	*39.6*	%	39.2	%	36.6	%	33.8	%	36.6	%	38.1	%	38.3	%
Bell Wireless	869		457		412		1,812		435		475		468		434
Margin	*36.8*	%	*37.8*	%	35.7	%	39.8	%	36.3	%	40.3	%	42.4	%	40.3	%
Total Bell	2,953		1,498		1,455		5,719		1,395		1,448		1,450		1,426
Margin	*39.1*	%	*39.5*	%	38.7	%	38.1	%	35.0	%	38.2	%	40.0	%	39.4	%
Bell Aliant	659		330		329		1,370		342		353		341		334
Margin	*43.0*	%	*43.8*	%	42.2	%	43.2	%	43.6	%	44.9	%	43.4	%	40.8	%
Total BCE Inc.	3,612		1,828		1,784		7,089		1,737		1,801		1,791		1,760
Margin	*40.7*	%	*41.2*	%	40.3	%	40.0	%	37.4	%	40.4	%	41.7	%	40.6	%
Operating income
Bell Wireline	1,017		501		516		1,148		280		229		290		349
Bell Wireless	590		319		271		1,284		292		354		338		300
Total Bell	1,607		820		787		2,432		572		583		628		649
Bell Aliant	360		185		175		759		179		199		196		185
Total BCE Inc.	1,967		1,005		962		3,191		751		782		824		834

Capital expenditures
Bell Wireline	834		455		379		1,717		498		412		455		352
Capital Intensity	*15.8*	%	*17.3*	%	14.3	%	16.1	%	17.5	%	15.5	%	17.7	%	13.6	%
Bell Wireless	135		83		52		673		142		177		224		130
Capital Intensity	*5.7*	%	*6.9*	%	4.5	%	14.8	%	11.9	%	15.0	%	20.3	%	12.1	%
Total Bell	969		538		431		2,390		640		589		679		482
Capital Intensity	*12.8*	%	*14.2*	%	11.5	%	15.9	%	16.1	%	15.5	%	18.7	%	13.3	%
Bell Aliant	220		125		95		464		120		115		121		108
Capital Intensity	*14.4*	%	*16.6*	%	12.2	%	14.6	%	15.3	%	14.6	%	15.4	%	13.2	%
Total BCE Inc.	1,189		663		526		2,854		760		704		800		590
Capital Intensity	*13.4*	%	*14.9*	%	11.9	%	16.1	%	16.3	%	15.8	%	18.6	%	13.6	%

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 5

Bell Wireline ⁽²⁾

	Q2		Q2				YTD		YTD
($ millions, except where otherwise indicated) (unaudited)	2010		2009		% change		2010		2009		% change
Bell Wireline
Local & access	758		796		(4.8	%)	1,520		1,601		(5.1	%)
Long distance	233		271		(14.0	%)	471		549		(14.2	%)
Data	909		919		(1.1	%)	1,821		1,831		(0.5	%)
Video	434		389		11.6	%	862		776		11.1	%
Equipment & other	219		119		84.0	%	456		252		81.0	%
Total external revenues	2,553		2,494		2.4	%	5,130		5,009		2.4	%
Inter-segment revenues	79		81		(2.5	%)	160		158		1.3	%
Total Bell Wireline operating revenue	2,632		2,575		2.2	%	5,290		5,167		2.4	%
Operating expenses	(1,591	)	(1,593	)	0.1	%	(3,206	)	(3,193	)	(0.4	%)
EBITDA	1,041		982		6.0	%	2,084		1,974		5.6	%
EBITDA Margin	*39.6*	%	38.1	%	1.5	pts	*39.4*	%	38.2	%	1.2	pts
Operating income	501		290		72.8	%	1,017		639		59.2	%

Capital expenditures	455		455		0.0	%	834		807		(3.3	%)
Capital intensity	*17.3*	%	17.7	%	0.4	pts	*15.8*	%	15.6	%	(0.2	) pts

Local
Network access services (NAS)
Residential	3,713,920		4,041,926		(8.1	%)	3,713,920		4,041,926		(8.1	%)
Business	2,918,126		3,029,686		(3.7	%)	2,918,126		3,029,686		(3.7	%)
Total	6,632,046		7,071,612		(6.2	%)	6,632,046		7,071,612		(6.2	%)
Network access service net (losses)/activations
Residential	(96,992	)	(101,379	)	4.3	%	(172,610	)	(179,145	)	3.6	%
Business	(32,155	)	(31,216	)	(3.0	%)	(56,366	)	(57,689	)	2.3	%
Total	(129,147	)	(132,595	)	2.6	%	(228,976	)	(236,834	)	3.3	%
Internet
High Speed Internet net activations	(3,899	)	1,991		n.m.		6,568		8,279		(20.7	%)
High Speed Internet subscribers EOP	2,063,559		2,062,812		0.0	%	2,063,559		2,062,812		0.0	%
Video (DTH and VDSL)
Net subscriber activations	9,775		20,018		(51.2	%)	29,664		31,761		(6.6	%)
Total subscribers EOP	1,978,541		1,883,532		5.0	%	1,978,541		1,883,532		5.0	%
ARPU ⁽⁶⁾ ($/month)	73.43		68.98		6.5	%	73.01		68.91		5.9	%
Churn ⁽⁷⁾ (%) (average per month)	1.3	%	1.1	%	(0.2	) pts	1.2	%	1.1	%	(0.1	) pts

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 6

Bell Wireline – Historical Trend

	YTD						Total
($ millions, except where otherwise indicated) (unaudited)	2010		Q2 10		Q1 10		2009		Q4 09		Q3 09		Q2 09		Q1 09
Bell Wireline
Local & access	1,520		758		762		3,159		775		783		796		805
Long distance	471		233		238		1,078		265		264		271		278
Data	1,821		909		912		3,696		973		892		919		912
Video	862		434		428		1,593		417		400		389		387
Equipment & other	456		219		237		817		324		241		119		133
Total external revenues	5,130		2,553		2,577		10,343		2,754		2,580		2,494		2,515
Inter-segment revenues	160		79		81		323		86		79		81		77
Total Bell Wireline operating revenue	5,290		2,632		2,658		10,666		2,840		2,659		2,575		2,592
Operating expenses	(3,206	)	(1,591	)	(1,615	)	(6,759	)	(1,880	)	(1,686	)	(1,593	)	(1,600	)
EBITDA	2,084		1,041		1,043		3,907		960		973		982		992
EBITDA Margin	*39.4*	%	*39.6*	%	39.2	%	36.6	%	33.8	%	36.6	%	38.1	%	38.3	%
Operating income	1,017		501		516		1,148		280		229		290		349

Capital expenditures	834		455		379		1,717		498		412		455		352
Capital intensity	*15.8*	%	*17.3*	%	14.3	%	16.1	%	17.5	%	15.5	%	17.7	%	13.6	%

Local
Network access services (NAS)
Residential	3,713,920		3,713,920		3,810,912		3,886,530		3,886,530		3,965,540		4,041,926		4,143,305
Business	2,918,126		2,918,126		2,950,281		2,974,492		2,974,492		3,002,985		3,029,686		3,060,902
Total	6,632,046		6,632,046		6,761,193		6,861,022		6,861,022		6,968,525		7,071,612		7,204,207
Network access service net (losses)/activations
Residential	(172,610	)	(96,992	)	(75,618	)	(334,541	)	(79,010	)	(76,386	)	(101,379	)	(77,766	)
Business	(56,366	)	(32,155	)	(24,211	)	(112,883	)	(28,493	)	(26,701	)	(31,216	)	(26,473	)
Total	(228,976	)	(129,147	)	(99,829	)	(447,424	)	(107,503	)	(103,087	)	(132,595	)	(104,239	)
Internet
High Speed Internet net activations	6,568		(3,899	)	10,467		37,618		7,808		21,531		1,991		6,288
High Speed Internet subscribers EOP ^(A)	2,063,559		2,063,559		2,067,458		2,056,991		2,056,991		2,084,343		2,062,812		2,060,821
Video (DTH and VDSL)
Net subscriber activations	29,664		9,775		19,889		113,315		40,889		40,665		20,018		11,743
Total subscribers EOP ^(A)	1,978,541		1,978,541		1,968,766		1,948,877		1,948,877		1,924,197		1,883,532		1,863,514
ARPU ($/month)	73.01		73.43		72.60		69.59		71.12		69.35		68.98		68.84
Churn (%) (average per month)	1.2	%	1.3	%	1.1	%	1.2	%	1.3	%	1.4	%	1.1	%	1.1	%

(A)	Following a company-wide review of subscriber metrics, our Internet and Video customer base were reduced by 35,160 and 16,209 respectively, at the end of Q4 2009.

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 7

Bell Wireless (2)

	Q2		Q2				YTD		YTD
($ millions, except where otherwise indicated) (unaudited)	2010		2009		% change		2010		2009		% change
Bell Wireless
Revenue
Service	1,114		1,005		10.8	%	2,170		1,991		9.0	%
Product	84		88		(4.5	%)	170		170		0.0	%
Total external Bell Wireless revenues	1,198		1,093		9.6	%	2,340		2,161		8.3	%
Inter-segment revenues	12		11		9.1	%	23		21		9.5	%
Total Bell Wireless operating revenues	1,210		1,104		9.6	%	2,363		2,182		8.3	%
Operating expenses	(753	)	(636	)	(18.4	%)	(1,494	)	(1,280	)	(16.7	%)
EBITDA	457		468		(2.4	%)	869		902		(3.7	%)
EBITDA margin (Total revenues)	*37.8*	%	42.4	%	(4.6	) pts	*36.8*	%	41.3	%	(4.5	) pts
EBITDA margin (Service revenues)	*41.0*	%	46.6	%	(5.6	) pts	*40.0*	%	45.3	%	(5.3	) pts
Operating Income	319		338		(5.6	%)	590		638		(7.5	%)

Capital expenditures	83		224		62.9	%	135		354		61.9	%
Capital intensity	6.9	%	20.3	%	13.4	pts	5.7	%	16.2	%	10.5	pts

Wireless gross activations ^(A)	480,639		403,751		19.0	%	909,473		769,603		18.2	%
Postpaid	300,579		243,886		23.2	%	564,891		454,017		24.4	%
Wireless net activations ^(A)	98,459		44,716		n.m		154,084		75,011		n.m.
Postpaid	102,754		64,181		60.1	%	183,966		99,202		85.4	%
Wireless subscribers EOP ^{(A) (C)}	6,987,386		6,572,532		6.3	%	6,987,386		6,572,532		6.3	%
Postpaid	5,225,196		4,844,369		7.9	%	5,225,196		4,844,369		7.9	%
Average revenue per unit (ARPU) ^(B)($/month)	52.12		52.05		0.1	%	51.10		51.79		(1.3	%)
Prepaid	18.35		16.41		11.8	%	17.61		15.89		10.8	%
Postpaid	63.66		62.58		1.7	%	62.70		62.46		0.4	%
Churn (%) ^(B) (average per month)	1.8	%	1.7	%	(0.1	) pts	1.8	%	1.7	%	(0.1	) pts
Prepaid	3.4	%	3.3	%	(0.1	) pts	3.4	%	3.1	%	(0.3	) pts
Postpaid	1.3	%	1.3	%	0.0	pts	1.3	%	1.3	%	0.0	pts
Usage per subscriber ^{(B) (C)}(min/month)	284		299		(5.0	%)	271		289		(6.2	%)
Cost of acquisition (COA) ^{(8) (B)} ($/sub)	374		356		(5.1	%)	368		375		1.9	%
PRO FORMA ^(D)
Average revenue per unit (ARPU) ^(D)($/month)	52.12		50.46		3.3	%	51.10		50.15		1.9	%
Prepaid	18.35		17.26		6.3	%	17.61		16.66		5.7	%
Postpaid	63.66		62.48		1.9	%	62.70		62.35		0.6	%
Churn (%) ^(D) (average per month)	1.8	%	1.8	%	0.0	pts	1.8	%	1.8	%	0.0	pts
Prepaid	3.4	%	3.3	%	(0.1	) pts	3.4	%	3.2	%	(0.2	) pts
Postpaid	1.3	%	1.3	%	0.0	pts	1.3	%	1.3	%	0.0	pts
Usage per subscriber ^{(C) (D)}(min/month)	284		290		(2.1	%)	271		280		(3.2	%)
Cost of acquisition (COA) ^{(8) (D)} ($/sub)	374		333		(12.3	%)	368		352		(4.5	%)

(A)	Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)	Beginning in Q3 2009, wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect 100% of Virgin’s results due to our acquisition on July 1, 2009 of the remaining 50% not already owned. All prior periods reflect the original 50% ownership.
(C)	Following a company-wide review of subscriber metrics, we reduced subscribers by 34,752 for postpaid and 2,074 for prepaid as at the end of Q4 2009. The definition of usage per subscriber has been refined and all prior periods have been restated for comparability.
(D)	Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition in the prior years have been restated to include 100% of Virgin Mobile results, rather than 50%.

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 8

Bell Wireless – Historical Trend

	YTD						Total
($ millions, except where otherwise indicated) (unaudited)	2010		Q2 10		Q1 10		2009		Q4 09		Q3 09		Q2 09		Q1 09
Bell Wireless
Revenue
Service	2,170		1,114		1,056		4,102		1,055		1,056		1,005		986
Product	170		84		86		405		129		106		88		82
Total external Bell Wireless revenues	2,340		1,198		1,142		4,507		1,184		1,162		1,093		1,068
Inter-segment revenues	23		12		11		51		14		16		11		10
Total Bell Wireless operating revenues	2,363		1,210		1,153		4,558		1,198		1,178		1,104		1,078
Operating expenses	(1,494	)	(753	)	(741	)	(2,746	)	(763	)	(703	)	(636	)	(644	)
EBITDA	869		457		412		1,812		435		475		468		434
EBITDA margin (Total revenues)	*36.8*	%	*37.8*	%	35.7	%	39.8	%	36.3	%	40.3	%	42.4	%	40.3	%
EBITDA margin (Service revenues)	*40.0*	%	*41.0*	%	39.0	%	44.2	%	41.2	%	45.0	%	46.6	%	44.0	%
Operating Income	590		319		271		1,284		292		354		338		300

Capital expenditures	135		83		52		673		142		177		224		130
Capital intensity	*5.7*	%	*6.9*	%	4.5	%	14.8	%	11.9	%	15.0	%	20.3	%	12.1	%

Wireless gross activations ^(A)	909,473		480,639		428,834		1,794,237		523,739		500,895		403,751		365,852
Postpaid	564,891		300,579		264,312		1,056,126		300,233		301,876		243,886		210,131
Wireless net activations ^(A)	154,084		98,459		55,625		372,607		162,859		134,737		44,716		30,295
Postpaid	183,966		102,754		81,212		330,815		109,921		121,692		64,181		35,021
Wireless subscribers EOP ^{(A) (C)}	6,987,386		6,987,386		6,888,927		6,833,302		6,833,302		6,707,269		6,572,532		6,527,816
Postpaid	5,225,196		5,225,196		5,122,442		5,041,230		5,041,230		4,966,061		4,844,369		4,780,188
Average revenue per unit (ARPU) ^(B)($/month)	51.10		52.12		50.07		51.70		51.08		52.13		52.05		51.52
Prepaid	17.61		18.35		16.87		17.15		18.45		18.36		16.41		15.38
Postpaid	62.70		63.66		61.72		62.87		62.47		64.09		62.58		62.34
Churn (%) ^(B) (average per month)	1.8	%	1.8	%	1.8	%	1.7	%	1.8	%	1.8	%	1.7	%	1.6	%
Prepaid	3.4	%	3.4	%	3.4	%	3.2	%	3.2	%	3.5	%	3.3	%	2.9	%
Postpaid	1.3	%	1.3	%	1.2	%	1.3	%	1.3	%	1.3	%	1.3	%	1.2	%
Usage per subscriber ^{(B) (C)}(min/month)	271		284		259		287		281		291		299		279
Cost of acquisition (COA) ^(B) ($/sub)	368		374		362		350		327		320		356		397
PRO FORMA ^(D)
Average revenue per unit (ARPU) ^(D)($/month)	51.10		52.12		50.07		50.88		51.08		52.13		50.46		49.84
Prepaid	17.61		18.35		16.87		17.53		18.45		18.36		17.26		16.05
Postpaid	62.70		63.66		61.72		62.81		62.47		64.09		62.48		62.24
Churn (%) ^(D) (average per month)	1.8	%	1.8	%	1.8	%	1.8	%	1.8	%	1.8	%	1.8	%	1.7	%
Prepaid	3.4	%	3.4	%	3.4	%	3.2	%	3.2	%	3.5	%	3.3	%	3.0	%
Postpaid	1.3	%	1.3	%	1.2	%	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%
Usage per subscriber ^{(C) (D)}(min/month)	271		284		259		283		281		291		290		271
Cost of acquisition (COA) ^(D) ($/sub)	368		374		362		336		327		320		333		374

(A)	Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)	Beginning in Q3 2009, wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect 100% of Virgin’s results due to our acquisition on July 1, 2009 of the remaining 50% not already owned. All prior periods reflect the original 50% ownership.
(C)	Following a company-wide review of subscriber metrics, we reduced subscribers by 34,752 for postpaid and 2,074 for prepaid as at the end of Q4 2009. The definition of usage per subscriber has been refined and all prior periods have been restated for comparability.
(D)	Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition in the prior years have been restated to include 100% of Virgin Mobile results, rather than 50%.

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 9

BCE Inc.
Net debt and other information ⁽²⁾

BCE Inc. – Net debt and preferreds

At June 30, 2010			BCE Inc.
(unaudited)
($ millions, except where otherwise indicated)
			Bell
	Bell		Aliant		BCE Inc.
Debt due within one year	511		159		670
Long-term debt	7,533		2,759		10,292
Securitization of accounts receivable	1,136		150		1,286
Preferred shares – BCE	2,770		-		2,770
Cash and cash equivalents	(916	)	(12	)	(928	)
Net debt	11,034		3,056		14,090

Bell – Balance Sheet Information
(unaudited)
($ millions, except where otherwise indicated)	June 30		March 31		Dec. 31
	2010		2010		2009

Debt due within one year	511		580		543
Long-term debt	7,533		7,543		7,541
Securitization of accounts receivable	1,136		1,140		1,140
Preferred shares – BCE	2,770		2,770		2,770
Cash and cash equivalents	(916	)	(730	)	(660	)
Net Debt	11,034		11,303		11,334

Net Debt: Trailing 12 month EBITDA, including Bell Aliant distributions to BCE	1.81		1.87		1.89
EBITDA, including Bell Aliant distributions to BCE: Net interest, securitization costs and preferred dividends (trailing 12 months)	9.42		9.17		8.79

Cash Flow Information
(unaudited)	Q2		Q2						YTD		YTD
($ millions, except where otherwise indicated)	2010		2009		$ change		% change		2010		2009		$ change		% change

Free Cash Flow (FCF)
Cash from operating activities	1,091		1,181		(90	)	(7.6	%)	2,044		1,904		140		7.4	%
Capital expenditures	(538	)	(679	)	141		20.8	%	(969	)	(1,161	)	192		16.5	%
Other investing activities	(32	)	(28	)	(4	)	(14.3	%)	(54	)	(42	)	(12	)	(28.6	%)
Dividends paid on preferred shares	(27	)	(27	)	-		-		(55	)	(55	)	-		-
Bell Aliant distributions to BCE	72		73		(1	)	(1.4	%)	145		146		(1	)	(0.7	%)
FCF	566		520		46		8.8	%	1,111		792		319		40.3	%

Cash Flow Information – Historical Trend
(unaudited)	YTD		Q2		Q1		Total		Q4		Q3		Q2		Q1
($ millions, except where otherwise indicated)	2010		2010		2010		2009		2009		2009		2009		2009

Free Cash Flow (FCF)
Cash from operating activities	2,044		1,091		953		3,755		621		1,230		1,181		723
Capital expenditures	(969	)	(538	)	(431	)	(2,390	)	(640	)	(589	)	(679	)	(482	)
Other investing activities	(54	)	(32	)	(22	)	(93	)	(12	)	(39	)	(28	)	(14	)
Dividends paid on preferred shares	(55	)	(27	)	(28	)	(107	)	(26	)	(26	)	(27	)	(28	)
Bell Aliant distributions to BCE	145		72		73		291		72		73		73		73
FCF	1,111		566		545		1,456		15		649		520		272

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 10

BCE Inc.
Consolidated Balance Sheet Data

	June 30		March 31		December 31
($ millions, except where otherwise indicated) (unaudited)	2010		2010		2009
*ASSETS*
Current assets
Cash and cash equivalents	928		748		687
Accounts receivable	1,375		1,523		1,605
Future income taxes	176		128		110
Inventory	417		446		448
Prepaid expenses	369		389		296
Other current assets	162		145		137
Current assets of discontinued operations	1		1		1
Total current assets	3,428		3,380		3,284
Capital assets
Property, plant and equipment	19,368		19,381		19,441
Finite-life intangible assets	2,415		2,483		2,541
Indefinite-life intangible assets	3,861		3,817		3,803
Total capital assets	25,644		25,681		25,785
Other long-term assets	3,175		3,126		3,207
Goodwill	5,771		5,774		5,774
Total assets	38,018		37,961		38,050
*LIABILITIES*
Current liabilities
Accounts payable and accrued liabilities	3,541		3,568		3,716
Interest payable	108		133		113
Dividends payable	373		375		354
Debt due within one year	670		747		600
Current liabilities of discontinued operations	4		3		3
Total current liabilities	4,696		4,826		4,786
Long-term debt	10,292		10,301		10,299
Other long-term liabilities	4,808		4,808		4,942
Total liabilities	19,796		19,935		20,027
Non-controlling interest	1,023		1,031		1,049
*SHAREHOLDERS’ EQUITY*
Preferred shares	2,770		2,770		2,770
Common shareholders’ equity
Common shares	12,790		12,851		12,921
Contributed surplus	2,479		2,485		2,490
Accumulated other comprehensive income	20		(38	)	92
Deficit	(860	)	(1,073	)	(1,299	)
Total common shareholders’ equity	14,429		14,225		14,204
Total shareholders’ equity	17,199		16,995		16,974
Total liabilities and shareholders’ equity	38,018		37,961		38,050

Number of common shares outstanding	759.1		763.0		767.2

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 11

BCE Inc.
Consolidated Cash Flow Data

($ millions, except where otherwise indicated) (unaudited)		Q2 2010			Q2 2009			$ change			YTD 2010			YTD 2009			$ change
Cash flows from operating activities
Net earnings		617			372			245			1,254			778			476
Less: Losses from discontinued operations, net of income taxes and non-controlling interest		-			(4	)		4			-			(10	)		10
Earnings from continuing operations		617			376			241			1,254			788			466
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities
Depreciation and amortization of intangible assets		815			821			(6	)		1,608			1,639			(31	)
Net benefit plans cost		66			88			(22	)		94			176			(82	)
Restructuring and other		8			146			(138	)		37			254			(217	)
Gains on investments		(10	)		-			(10	)		(135	)		(2	)		(133	)
Future income taxes		(18	)		(5	)		(13	)		6			(18	)		24
Non-controlling interest		83			80			3			159			164			(5	)
Contributions to employee pension plans		(144	)		(92	)		(52	)		(299	)		(184	)		(115	)
Other employee future benefit plan payments		(24	)		(23	)		(1	)		(48	)		(47	)		(1	)
Payments of restructuring and other		(49	)		(105	)		56			(143	)		(182	)		39
Operating assets and liabilities		44			188			(144	)		(47	)		(189	)		142
Cash flows from operating activities		1,388			1,474			(86	)		2,486			2,399			87
Bell Aliant distributions to BCE		72			73			(1	)		145			146			(1	)
Capital expenditures		(663	)		(800	)		137			(1,189	)		(1,390	)		201
Other investing activities		(31	)		(27	)		(4	)		(52	)		(40	)		(12	)
Cash dividends paid on preferred shares		(27	)		(27	)		-			(55	)		(55	)		-
Cash distributions paid by subsidiaries to non-controlling interest		(93	)		(92	)		(1	)		(185	)		(184	)		(1	)
Bell Aliant Free Cash Flow		(80	)		(81	)		1			(39	)		(84	)		45
Free Cash Flow ⁽³⁾		566			520			46			1,111			792			319
Bell Aliant undistributed Free Cash Flow		8			8			-			(106	)		(62	)		(44	)
Business acquisitions		4			(1	)		5			13			(21	)		34
Business dispositions		8			-			8			8			-			8
Going-private costs		-			(1	)		1			-			(7	)		7
Increase in investments		(3	)		(1	)		(2	)		(3	)		(1	)		(2	)
Decrease in investments		123			-			123			133			-			133
Increase (decrease) in notes payable and bank advances		2			(238	)		240			114			(150	)		264
Issue of long-term debt		-			1,348			(1,348	)		-			1,348			(1,348	)
Repayment of long-term debt		(175	)		(1,586	)		1,411			(231	)		(1,680	)		1,449
Cash dividends paid on common shares		(333	)		(301	)		(32	)		(643	)		(595	)		(48	)
Issue of common shares		12			1			11			13			2			11
Repurchase of common shares		(125	)		(337	)		212			(250	)		(894	)		644
Other financing activities		92			(31	)		123			81			(41	)		122
		(387	)		(1,139	)		752			(871	)		(2,101	)		1,230
Cash flows from (used in) continuing operations		179			(619	)		798			240			(1,309	)		1,549
Cash flows from (used in) discontinued operations activities		1			3			(2	)		1			(5	)		6
Cash flows from discontinued investing activities		-			17			(17	)		-			17			(17	)
Net increase (decrease) in cash and cash equivalents		180			(599	)		779			241			(1,297	)		1,538
Cash and cash equivalents at beginning of period		749			2,365			(1,616	)		688			3,063			(2,375	)
Cash and cash equivalents at end of period		929			1,766			(837	)		929			1,766			(837	)
Consists of:
Cash and cash equivalents of continuing operations		928			1,761			(833	)		928			1,761			(833	)
Cash and cash equivalents of discontinued operations		1			5			(4	)		1			5			(4	)
Total		929			1,766			(837	)		929			1,766			(837	)

Other information
Cash flow per share ⁽⁹⁾	$	0.95		$	0.88		$	0.07		$	1.70		$	1.30		$	0.40
Annualized cash flow yield ⁽¹⁰⁾		7.5	%		8.3	%		(0.8	) pts		7.5	%		8.3	%		(0.8	) pts
Common dividend payout ⁽¹¹⁾		56.5	%		66.4	%		(9.9	) pts		61.3	%		67.0	%		(5.1	) pts

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 12

BCE Inc.
Consolidated Cash Flow Data – Historical Trend

		YTD									Total
($ millions, except where otherwise indicated) (unaudited)		2010			Q2 10			Q1 10			2009			Q4 09			Q3 09			Q2 09			Q1 09
Cash flows from operating activities
Net earnings		1,254			617			637			1,738			376			584			372			406
Less: Losses from discontinued operations, net of income taxes and non-controlling interest		-			-			-			(11	)		(1	)		-			(4	)		(6	)
Earnings from continuing operations		1,254			617			637			1,749			377			584			376			412
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities
Depreciation and amortization of intangible assets		1,608			815			793			3,371			904			828			821			818
Net benefit plans cost		94			66			28			355			93			86			88			88
Restructuring and other		37			8			29			527			82			191			146			108
Gains on investments		(135	)		(10	)		(125	)		(49	)		(11	)		(36	)		-			(2	)
Future income taxes		6			(18	)		24			32			278			(228	)		(5	)		(13	)
Non-controlling interest		159			83			76			333			79			90			80			84
Contributions to employee pension plans		(299	)		(144	)		(155	)		(1,068	)		(785	)		(99	)		(92	)		(92	)
Other employee future benefit plan payments		(48	)		(24	)		(24	)		(96	)		(24	)		(25	)		(23	)		(24	)
Payments of restructuring and other		(143	)		(49	)		(94	)		(310	)		(58	)		(70	)		(105	)		(77	)
Operating assets and liabilities		(47	)		44			(91	)		40			13			216			188			(377	)
Cash flows from operating activities		2,486			1,388			1,098			4,884			948			1,537			1,474			925
Bell Aliant distributions to BCE		145			72			73			291			72			73			73			73
Capital expenditures		(1,189	)		(663	)		(526	)		(2,854	)		(760	)		(704	)		(800	)		(590	)
Other investing activities		(52	)		(31	)		(21	)		(89	)		(11	)		(38	)		(27	)		(13	)
Cash dividends paid on preferred shares		(55	)		(27	)		(28	)		(107	)		(26	)		(26	)		(27	)		(28	)
Cash distributions paid by subsidiaries to non-controlling interest		(185	)		(93	)		(92	)		(369	)		(92	)		(93	)		(92	)		(92	)
Bell Aliant Free Cash Flow		(39	)		(80	)		41			(300	)		(116	)		(100	)		(81	)		(3	)
Free Cash Flow		1,111			566			545			1,456			15			649			520			272
Bell Aliant undistributed Free Cash Flow		(106	)		8			(114	)		9			44			27			8			(70	)
Business acquisitions		13			4			9			(338	)		(4	)		(313	)		(1	)		(20	)
Business dispositions		8			8			-			11			1			10			-			-
Going-private costs		-			-			-			(7	)		-			-			(1	)		(6	)
Increase in investments		(3	)		(3	)		-			(53	)		(50	)		(2	)		(1	)		-
Decrease in investments		133			123			10			113			58			55			-			-
Increase (decrease) in notes payable and bank advances		114			2			112			(194	)		(39	)		(5	)		(238	)		88
Issue of long-term debt		-			-			-			1,348			-			-			1,348			-
Repayment of long-term debt		(231	)		(175	)		(56	)		(2,539	)		(203	)		(656	)		(1,586	)		(94	)
Cash dividends paid on common shares		(643	)		(333	)		(310	)		(1,201	)		(310	)		(296	)		(301	)		(294	)
Issue of common shares		13			12			1			2			-			-			1			1
Repurchase of common shares		(250	)		(125	)		(125	)		(894	)		-			-			(337	)		(557	)
Other financing activities		81			92			(11	)		(90	)		(11	)		(38	)		(31	)		(10	)
		(871	)		(387	)		(484	)		(3,833	)		(514	)		(1,218	)		(1,139	)		(962	)
Cash flows from (used in) continuing operations		240			179			61			(2,377	)		(499	)		(569	)		(619	)		(690	)
Cash flows from (used in) discontinued operations activities		1			1			-			(9	)		(2	)		(2	)		3			(8	)
Cash flows from (used in) discontinued investing activities		-			-			-			11			-			(6	)		17			-
Net increase (decrease) in cash and cash equivalents		241			180			61			(2,375	)		(501	)		(577	)		(599	)		(698	)
Cash and cash equivalents at beginning of period		688			749			688			3,063			1,189			1,766			2,365			3,063
Cash and cash equivalents at end of period		929			929			749			688			688			1,189			1,766			2,365
Consists of:
Cash and cash equivalents of continuing operations		928			928			748			687			687			1,187			1,761			2,356
Cash and cash equivalents of discontinued operations		1			1			1			1			1			2			5			9
Total		929			929			749			688			688			1,189			1,766			2,365

Other information
Cash flow per share	$	1.70		$	0.95		$	0.75		$	2.63		$	0.25		$	1.08		$	0.88		$	0.42
Annualized cash flow yield		7.5	%		7.5	%		7.6	%		6.5	%		6.5	%		10.3	%		8.3	%		8.5	%
Common dividend payout		61.3	%		56.5	%		66.9	%		63.2	%		79.4	%		48.2	%		66.4	%		67.5	%

BCE Inc. Supplementary Financial Information – Second Quarter 2010 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 subsidiaries.
(2)	We report our results of operations in three segments: Bell Wireline, Bell Wireless and Bell Aliant. 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. During the third quarter of 2008, certain elements of our operating segments were realigned to reflect changes in our management accountabilities for operations. Our reportable segments did not change.
(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 measurement to value companies in the telecommunications industry. The most comparable Canadian GAAP financial measure is operating income. Adjusted earnings per share (EPS) The term adjusted EPS 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 define adjusted EPS as EPS before restructuring and other and net losses (gains) on investments.

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 14

Accompanying Notes

	We use adjusted EPS among other measures, to assess the operating performance of our ongoing businesses without the effects of after-tax restructuring and other and net losses (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. FREE CASH FLOW 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 define free cash flow as cash from operating activities and distributions received from Bell Aliant less capital expenditures, preferred share dividends, distributions paid by subsidiaries to non-controlling interest, other investing activities and Bell Aliant free cash flow. 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.

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 15

Accompanying Notes

(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: Trailing 12 month free cash flow Number of common shares outstanding at end of period multiplied by share price at end of period
(11)	Common dividend payout is calculated as follows: Dividends per common share Adjusted EPS

BCE Inc. Supplementary Financial Information – Second Quarter 2010 Page 16