BCE Inc. Supplementary Financial Information

EX-99.3 4 supp_q310.htm SUPPLEMENTARY FINANCIAL INFORMATION - THIRD QUARTER 2010 BCE Inc. Supplementary Financial Information – Third Quarter 2010

EXHIBIT 99.3

BCE Inc. ⁽¹⁾
Consolidated Operational Data

($ millions, except per share amounts) (unaudited)		Q3 2010			Q3 2009			$ change		% change			YTD 2010			YTD 2009			$ change		% change
Operating revenues		4,516			4,457			59		1.3	%		13,386			13,085			301		2.3	%
Cost of revenue, exclusive of depreciation and amortization		(1,204	)		(1,152	)		(52	)	(4.5	%)		(3,534	)		(3,267	)		(267	)	(8.2	%)
Selling, general and administrative expenses ^(A)		(1,415	)		(1,418	)		3		0.2	%		(4,249	)		(4,204	)		(45	)	(1.1	%)
Net benefit plans cost		(65	)		(86	)		21		24.4	%		(159	)		(262	)		103		39.3	%
EBITDA ⁽³⁾		1,832			1,801			31		1.7	%		5,444			5,352			92		1.7	%
EBITDA margin ⁽⁴⁾		*40.6*	%		40.4	%				0.2	pts		*40.7*	%		40.9	%				(0.2	) pts
Depreciation		(647	)		(636	)		(11	)	(1.7	%)		(1,887	)		(1,891	)		4		0.2	%
Amortization of intangible assets		(181	)		(192	)		11		5.7	%		(549	)		(576	)		27		4.7	%
Restructuring and other		(135	)		(191	)		56		29.3	%		(172	)		(445	)		273		61.3	%
Operating income		869			782			87		11.1	%		2,836			2,440			396		16.2	%
Other (expense) income		(19	)		(24	)		5		20.8	%		121			(46	)		167		n.m.
Interest expense		(165	)		(171	)		6		3.5	%		(496	)		(541	)		45		8.3	%
Pre-tax earnings from continuing operations		685			587			98		16.7	%		2,461			1,853			608		32.8	%
Income tax (expense) recovery		(51	)		87			(138	)	n.m.			(414	)		(227	)		(187	)	(82.4	%)
Non-controlling interest		(79	)		(90	)		11		12.2	%		(238	)		(254	)		16		6.3	%
Earnings from continuing operations		555			584			(29	)	(5.0	%)		1,809			1,372			437		31.9	%
Discontinued operations		–			–			–		–			–			(10	)		10		100.0	%
Net earnings		555			584			(29	)	(5.0	%)		1,809			1,362			447		32.8	%
Dividends on preferred shares		(27	)		(26	)		(1	)	(3.8	%)		(83	)		(81	)		(2	)	(2.5	%)
Net earnings applicable to common shares		528			558			(30	)	(5.4	%)		1,726			1,281			445		34.7	%
Net earnings per common share – basic
Continuing operations	$	0.70		$	0.72		$	(0.02	)	(2.8	%)	$	2.27		$	1.66		$	0.61		36.7	%
Discontinued operations	$	–		$	–		$	–		–		$	–		$	(0.01	)	$	0.01		100.0	%
Net earnings	$	0.70		$	0.72		$	(0.02	)	(2.8	%)	$	2.27		$	1.65		$	0.62		37.6	%
Net earnings per common share – diluted
Continuing operations	$	0.70		$	0.72		$	(0.02	)	(2.8	%)	$	2.27		$	1.66		$	0.61		36.7	%
Discontinued operations	$	–		$	–		$	–		–		$	–		$	(0.01	)	$	0.01		100.0	%
Net earnings	$	0.70		$	0.72		$	(0.02	)	(2.8	%)	$	2.27		$	1.65		$	0.62		37.6	%
Dividends per common share	$	0.458		$	0.405		$	0.053		13.1	%	$	1.328		$	1.175		$	0.153		13.0	%
Average number of common shares outstanding – basic (millions)		756.7			767.2								760.7			774.8
Average number of common shares outstanding – diluted (millions)		757.3			767.2								761.1			774.8

The following items are included in net earnings:
Net gains (losses) on investments
Continuing operations		–			36			(36	)	100.0	%		133			37			96		n.m.
Discontinued operations		–			(4	)		4		100.0	%		–			(7	)		7		100.0	%
Restructuring and other		(93	)		(123	)		30		24.4	%		(109	)		(291	)		182		62.5	%
Total		(93	)		(91	)		(2	)	(2.2	%)		24			(261	)		285		n.m.
Impact on net earnings per share	$	(0.12	)	$	(0.12	)	$	–		–		$	0.03		$	(0.34	)	$	0.37		n.m.
Adjusted EPS ⁽³⁾	$	0.82		$	0.84		$	(0.02	)	(2.4	%)	$	2.24		$	1.99		$	0.25		12.6	%

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

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

BCE Inc.
Consolidated Operational Data – Historical Trend

($ millions, except per share amounts) (unaudited)		YTD 2010			Q3 10			Q2 10			Q1 10			Total 2009			Q4 09			Q3 09			Q2 09			Q1 09
Operating revenues		13,386			4,516			4,438			4,432			17,735			4,650			4,457			4,297			4,331
Cost of revenue, exclusive of depreciation and amortization		(3,534	)		(1,204	)		(1,156	)		(1,174	)		(4,525	)		(1,258	)		(1,152	)		(1,029	)		(1,086	)
Selling, general and administrative expenses ^(A)		(4,249	)		(1,415	)		(1,388	)		(1,446	)		(5,766	)		(1,562	)		(1,418	)		(1,389	)		(1,397	)
Net benefit plans cost		(159	)		(65	)		(66	)		(28	)		(355	)		(93	)		(86	)		(88	)		(88	)
EBITDA		5,444			1,832			1,828			1,784			7,089			1,737			1,801			1,791			1,760
*EBITDA margin*		*40.7*	%		*40.6*	%		41.2	%		40.3	%		40.0	%		37.4	%		40.4	%		41.7	%		40.6	%
Depreciation		(1,887	)		(647	)		(630	)		(610	)		(2,595	)		(704	)		(636	)		(630	)		(625	)
Amortization of intangible assets		(549	)		(181	)		(185	)		(183	)		(776	)		(200	)		(192	)		(191	)		(193	)
Restructuring and other		(172	)		(135	)		(8	)		(29	)		(527	)		(82	)		(191	)		(146	)		(108	)
Operating income		2,836			869			1,005			962			3,191			751			782			824			834
Other income (expense)		121			(19	)		20			120			(18	)		28			(24	)		(23	)		1
Interest expense		(496	)		(165	)		(166	)		(165	)		(723	)		(182	)		(171	)		(179	)		(191	)
Pre-tax earnings from continuing operations		2,461			685			859			917			2,450			597			587			622			644
Income tax (expense) recovery		(414	)		(51	)		(159	)		(204	)		(368	)		(141	)		87			(166	)		(148	)
Non-controlling interest		(238	)		(79	)		(83	)		(76	)		(333	)		(79	)		(90	)		(80	)		(84	)
Earnings from continuing operations		1,809			555			617			637			1,749			377			584			376			412
Discontinued operations		–			–			–			–			(11	)		(1	)		–			(4	)		(6	)
Net earnings		1,809			555			617			637			1,738			376			584			372			406
Dividends on preferred shares		(83	)		(27	)		(27	)		(29	)		(107	)		(26	)		(26	)		(26	)		(29	)
Net earnings applicable to common shares		1,726			528			590			608			1,631			350			558			346			377
Net earnings per common share – basic
Continuing operations	$	2.27		$	0.70		$	0.78		$	0.79		$	2.12		$	0.46		$	0.72		$	0.45		$	0.49
Discontinued operations	$	–		$	–		$	–		$	–		$	(0.01	)	$	–		$	–		$	–		$	(0.01	)
Net earnings	$	2.27		$	0.70		$	0.78		$	0.79		$	2.11		$	0.46		$	0.72		$	0.45		$	0.48
Net earnings per common share – diluted
Continuing operations	$	2.27		$	0.70		$	0.78		$	0.79		$	2.12		$	0.46		$	0.72		$	0.45		$	0.49
Discontinued operations	$	–		$	–		$	–		$	–		$	(0.01	)	$	–		$	–		$	–		$	(0.01	)
Net earnings	$	2.27		$	0.70		$	0.78		$	0.79		$	2.11		$	0.46		$	0.72		$	0.45		$	0.48
Dividends per common share	$	1.328		$	0.458		$	0.435		$	0.435		$	1.580		$	0.405		$	0.405		$	0.385		$	0.385
Average number of common shares outstanding – basic (millions)		760.7			756.7			759.7			765.7			772.9			767.2			767.2			769.0			788.3
Average number of common shares outstanding – diluted (millions)		761.1			757.3			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		(109	)		(93	)		1			(17	)		(339	)		(48	)		(123	)		(98	)		(70	)
Total		24			(93	)		9			108			(298	)		(37	)		(91	)		(101	)		(69	)
Impact on net earnings per share	$	0.03		$	(0.12	)	$	0.01		$	0.14		$	(0.39	)	$	(0.05	)	$	(0.12	)	$	(0.13	)	$	(0.09	)
Adjusted EPS	$	2.24		$	0.82		$	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 – Third Quarter 2010 Page 3

BCE Inc.
Segmented Data ⁽²⁾

($ millions, except where otherwise indicated) (unaudited)	Q3 2010		Q3 2009		$ change		% change		YTD 2010		YTD 2009		$ change		% change

Revenues
Bell Wireline	2,636		2,659		(23	)	(0.9	%)	7,926		7,826		100		1.3	%
Bell Wireless	1,274		1,178		96		8.1	%	3,637		3,360		277		8.2	%
Inter-segment eliminations	(52	)	(49	)	(3	)	(6.1	%)	(155	)	(148	)	(7	)	(4.7	%)
Total Bell	3,858		3,788		70		1.8	%	11,408		11,038		370		3.4	%
Bell Aliant	762		786		(24	)	(3.1	%)	2,294		2,389		(95	)	(4.0	%)
Inter-segment eliminations	(104	)	(117	)	13		11.1	%	(316	)	(342	)	26		7.6	%
Total BCE Inc.	4,516		4,457		59		1.3	%	13,386		13,085		301		2.3	%

EBITDA
Bell Wireline	1,026		973		53		5.4	%	3,110		2,947		163		5.5	%
Margin	*38.9*	%	36.6	%			2.3	pts	*39.2*	%	37.7	%			1.5	pts
Bell Wireless	467		475		(8	)	(1.7	%)	1,336		1,377		(41	)	(3.0	%)
Margin	*36.7*	%	40.3	%			(3.6	) pts	*36.7*	%	41.0	%			(4.3	) pts
Total Bell	1,493		1,448		45		3.1	%	4,446		4,324		122		2.8	%
Margin	*38.7*	%	38.2	%			0.5	pts	*39.0*	%	39.2	%			(0.2	) pts
Bell Aliant	339		353		(14	)	(4.0	%)	998		1,028		(30	)	(2.9	%)
Margin	*44.5*	%	44.9	%			(0.4	) pts	*43.5*	%	43.0	%			0.5	pts
Total BCE Inc.	1,832		1,801		31		1.7	%	5,444		5,352		92		1.7	%
Margin	*40.6*	%	40.4	%			0.2	pts	*40.7*	%	40.9	%			(0.2	) pts

Operating income
Bell Wireline	341		229		112		48.9	%	1,358		868		490		56.5	%
Bell Wireless	333		354		(21	)	(5.9	%)	923		992		(69	)	(7.0	%)
Total Bell	674		583		91		15.6	%	2,281		1,860		421		22.6	%
Bell Aliant	195		199		(4	)	(2.0	%)	555		580		(25	)	(4.3	%)
Total BCE Inc.	869		782		87		11.1	%	2,836		2,440		396		16.2	%

Capital expenditures
Bell Wireline	513		412		(101	)	(24.5	%)	1,347		1,219		(128	)	(10.5	%)
Capital Intensity ⁽⁵⁾	*19.5*	%	15.5	%			(4.0	) pts	*17.0*	%	15.6	%			(1.4	) pts
Bell Wireless	121		177		56		31.6	%	256		531		275		51.8	%
Capital Intensity	*9.5*	%	15.0	%			5.5	pts	*7.0*	%	15.8	%			8.8	pts
Total Bell	634		589		(45	)	(7.6	%)	1,603		1,750		147		8.4	%
Capital Intensity	*16.4*	%	15.5	%			(0.9	) pts	*14.1*	%	15.9	%			1.8	pts
Bell Aliant	114		115		1		0.9	%	334		344		10		2.9	%
Capital Intensity	*15.0*	%	14.6	%			(0.4	) pts	14.6	%	14.4	%			(0.2	) pts
Total BCE Inc.	748		704		(44	)	(6.3	%)	1,937		2,094		157		7.5	%
Capital Intensity	*16.6*	%	15.8	%			(0.8	) pts	*14.5*	%	16.0	%			1.5	pts

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

BCE Inc.
Segmented Data – Historical Trend

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

Revenues
Bell Wireline	7,926		2,636		2,632		2,658		10,666		2,840		2,659		2,575		2,592
Bell Wireless	3,637		1,274		1,210		1,153		4,558		1,198		1,178		1,104		1,078
Inter-segment eliminations	(155	)	(52	)	(50	)	(53	)	(204	)	(56	)	(49	)	(51	)	(48	)
Total Bell	11,408		3,858		3,792		3,758		15,020		3,982		3,788		3,628		3,622
Bell Aliant	2,294		762		753		779		3,174		785		786		785		818
Inter-segment eliminations	(316	)	(104	)	(107	)	(105	)	(459	)	(117	)	(117	)	(116	)	(109	)
Total BCE Inc.	13,386		4,516		4,438		4,432		17,735		4,650		4,457		4,297		4,331

EBITDA
Bell Wireline	3,110		1,026		1,041		1,043		3,907		960		973		982		992
Margin	*39.2*	%	*38.9*	%	39.6	%	39.2	%	36.6	%	33.8	%	36.6	%	38.1	%	38.3	%
Bell Wireless	1,336		467		457		412		1,812		435		475		468		434
Margin	*36.7*	%	*36.7*	%	37.8	%	35.7	%	39.8	%	36.3	%	40.3	%	42.4	%	40.3	%
Total Bell	4,446		1,493		1,498		1,455		5,719		1,395		1,448		1,450		1,426
Margin	*39.0*	%	*38.7*	%	39.5	%	38.7	%	38.1	%	35.0	%	38.2	%	40.0	%	39.4	%
Bell Aliant	998		339		330		329		1,370		342		353		341		334
Margin	*43.5*	%	*44.5*	%	43.8	%	42.2	%	43.2	%	43.6	%	44.9	%	43.4	%	40.8	%
Total BCE Inc.	5,444		1,832		1,828		1,784		7,089		1,737		1,801		1,791		1,760
Margin	*40.7*	%	*40.6*	%	41.2	%	40.3	%	40.0	%	37.4	%	40.4	%	41.7	%	40.6	%

Operating income
Bell Wireline	1,358		341		501		516		1,148		280		229		290		349
Bell Wireless	923		333		319		271		1,284		292		354		338		300
Total Bell	2,281		674		820		787		2,432		572		583		628		649
Bell Aliant	555		195		185		175		759		179		199		196		185
Total BCE Inc.	2,836		869		1,005		962		3,191		751		782		824		834

Capital expenditures
Bell Wireline	1,347		513		455		379		1,717		498		412		455		352
Capital Intensity	*17.0*	%	*19.5*	%	17.3	%	14.3	%	16.1	%	17.5	%	15.5	%	17.7	%	13.6	%
Bell Wireless	256		121		83		52		673		142		177		224		130
Capital Intensity	*7.0*	%	*9.5*	%	6.9	%	4.5	%	14.8	%	11.9	%	15.0	%	20.3	%	12.1	%
Total Bell	1,603		634		538		431		2,390		640		589		679		482
Capital Intensity	*14.1*	%	*16.4*	%	14.2	%	11.5	%	15.9	%	16.1	%	15.5	%	18.7	%	13.3	%
Bell Aliant	334		114		125		95		464		120		115		121		108
Capital Intensity	*14.6*	%	*15.0*	%	16.6	%	12.2	%	14.6	%	15.3	%	14.6	%	15.4	%	13.2	%
Total BCE Inc.	1,937		748		663		526		2,854		760		704		800		590
Capital Intensity	*14.5*	%	*16.6*	%	14.9	%	11.9	%	16.1	%	16.3	%	15.8	%	18.6	%	13.6	%

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

Bell Wireline ⁽²⁾

	Q3		Q3				YTD		YTD
($ millions, except where otherwise indicated) (unaudited)	2010		2009		% change		2010		2009		% change
Bell Wireline
Local & access	759		783		(3.1	%)	2,279		2,384		(4.4	%)
Long distance	227		264		(14.0	%)	698		813		(14.1	%)
Data	900		892		0.9	%	2,721		2,723		(0.1	%)
Video	437		400		9.3	%	1,299		1,176		10.5	%
Equipment & other	231		241		(4.1	%)	687		493		39.4	%
Total external revenues	2,554		2,580		(1.0	%)	7,684		7,589		1.3	%
Inter-segment revenues	82		79		3.8	%	242		237		2.1	%
Total Bell Wireline operating revenue	2,636		2,659		(0.9	%)	7,926		7,826		1.3	%
Operating expenses	(1,610	)	(1,686	)	4.5	%	(4,816	)	(4,879	)	1.3	%
EBITDA	1,026		973		5.4	%	3,110		2,947		5.5	%
EBITDA Margin	*38.9*	%	36.6	%	2.3	pts	*39.2*	%	37.7	%	1.5	pts
Operating income	341		229		48.9	%	1,358		868		56.5	%

Capital expenditures	513		412		(24.5	%)	1,347		1,219		(10.5	%)
Capital intensity	*19.5*	%	15.5	%	(4.0	) pts	*17.0*	%	15.6	%	(1.4	) pts

Local
Network access services (NAS)
Residential	3,645,437		3,965,540		(8.1	%)	3,645,437		3,965,540		(8.1	%)
Business	2,894,440		3,002,985		(3.6	%)	2,894,440		3,002,985		(3.6	%)
Total	6,539,877		6,968,525		(6.2	%)	6,539,877		6,968,525		(6.2	%)
Network access service net (losses)/activations
Residential	(68,483	)	(76,386	)	10.3	%	(241,093	)	(255,531	)	5.7	%
Business	(23,686	)	(26,701	)	11.3	%	(80,052	)	(84,390	)	5.1	%
Total	(92,169	)	(103,087	)	10.6	%	(321,145	)	(339,921	)	5.5	%
Internet
High Speed Internet net activations	21,668		21,531		0.6	%	28,236		29,810		(5.3	%)
High Speed Internet subscribers EOP	2,085,227		2,084,343		0.0	%	2,085,227		2,084,343		0.0	%
Video (DTH and VDSL)
Net subscriber activations	18,538		40,665		(54.4	%)	48,202		72,426		(33.4	%)
Total subscribers EOP	1,997,079		1,924,197		3.8	%	1,997,079		1,924,197		3.8	%
ARPU ⁽⁶⁾($/month)	73.34		69.35		5.8	%	73.11		69.06		5.9	%
Churn ⁽⁷⁾(%) (average per month)	1.6	%	1.4	%	(0.2	) pts	1.3	%	1.2	%	(0.1	) pts

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

Bell Wireline – Historical Trend

($ millions, except where otherwise indicated) (unaudited)	YTD 2010		Q3 10		Q2 10		Q1 10		Total 2009		Q4 09		Q3 09		Q2 09		Q1 09
Bell Wireline
Local & access	2,279		759		758		762		3,159		775		783		796		805
Long distance	698		227		233		238		1,078		265		264		271		278
Data	2,721		900		909		912		3,696		973		892		919		912
Video	1,299		437		434		428		1,593		417		400		389		387
Equipment & other	687		231		219		237		817		324		241		119		133
Total external revenues	7,684		2,554		2,553		2,577		10,343		2,754		2,580		2,494		2,515
Inter-segment revenues	242		82		79		81		323		86		79		81		77
Total Bell Wireline operating revenue	7,926		2,636		2,632		2,658		10,666		2,840		2,659		2,575		2,592
Operating expenses	(4,816	)	(1,610	)	(1,591	)	(1,615	)	(6,759	)	(1,880	)	(1,686	)	(1,593	)	(1,600	)
EBITDA	3,110		1,026		1,041		1,043		3,907		960		973		982		992
EBITDA Margin	*39.2*	%	*38.9*	%	39.6	%	39.2	%	36.6	%	33.8	%	36.6	%	38.1	%	38.3	%
Operating income	1,358		341		501		516		1,148		280		229		290		349

Capital expenditures	1,347		513		455		379		1,717		498		412		455		352
Capital intensity	*17.0*	%	*19.5*	%	17.3	%	14.3	%	16.1	%	17.5	%	15.5	%	17.7	%	13.6	%

Local
Network access services (NAS)
Residential	3,645,437		3,645,437		3,713,920		3,810,912		3,886,530		3,886,530		3,965,540		4,041,926		4,143,305
Business	2,894,440		2,894,440		2,918,126		2,950,281		2,974,492		2,974,492		3,002,985		3,029,686		3,060,902
Total	6,539,877		6,539,877		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	(241,093	)	(68,483	)	(96,992	)	(75,618	)	(334,541	)	(79,010	)	(76,386	)	(101,379	)	(77,766	)
Business	(80,052	)	(23,686	)	(32,155	)	(24,211	)	(112,883	)	(28,493	)	(26,701	)	(31,216	)	(26,473	)
Total	(321,145	)	(92,169	)	(129,147	)	(99,829	)	(447,424	)	(107,503	)	(103,087	)	(132,595	)	(104,239	)
Internet
High Speed Internet net activations	28,236		21,668		(3,899	)	10,467		37,618		7,808		21,531		1,991		6,288
High Speed Internet subscribers EOP ^(A)	2,085,227		2,085,227		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	48,202		18,538		9,775		19,889		113,315		40,889		40,665		20,018		11,743
Total subscribers EOP ^(A)	1,997,079		1,997,079		1,978,541		1,968,766		1,948,877		1,948,877		1,924,197		1,883,532		1,863,514
ARPU ($/month)	73.11		73.34		73.43		72.60		69.59		71.12		69.35		68.98		68.84
Churn (%) (average per month)	1.3	%	1.6	%	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 – Third Quarter 2010 Page 7

Bell Wireless ⁽²⁾

	Q3		Q3				YTD		YTD
($ millions, except where otherwise indicated) (unaudited)	2010		2009		% change		2010		2009		% change
Bell Wireless
Revenue
Service	1,160		1,056		9.8	%	3,330		3,047		9.3	%
Product	103		106		(2.8	%)	273		276		(1.1	%)
Total external Bell Wireless revenues	1,263		1,162		8.7	%	3,603		3,323		8.4	%
Inter-segment revenues	11		16		(31.3	%)	34		37		(8.1	%)
Total Bell Wireless operating revenues	1,274		1,178		8.1	%	3,637		3,360		8.2	%
Operating expenses	(807	)	(703	)	(14.8	%)	(2,301	)	(1,983	)	(16.0	%)
EBITDA	467		475		(1.7	%)	1,336		1,377		(3.0	%)
EBITDA margin (Total revenues)	*36.7*	%	40.3	%	(3.6	) pts	*36.7*	%	41.0	%	(4.3	) pts
EBITDA margin (Service revenues)	*40.3*	%	45.0	%	(4.7	) pts	*40.1*	%	45.2	%	(5.1	) pts
Operating Income	333		354		(5.9	%)	923		992		(7.0	%)

Capital expenditures	121		177		31.6	%	256		531		51.8	%
Capital intensity	9.5	%	15.0	%	5.5	pts	7.0	%	15.8	%	8.8	pts

Wireless gross activations ^(A)	537,295		500,895		7.3	%	1,446,768		1,270,498		13.9	%
Postpaid	368,154		301,876		22.0	%	933,045		755,893		23.4	%
Wireless net activations ^(A)	137,880		134,737		2.3	%	291,964		209,748		39.2	%
Postpaid	159,465		121,692		31.0	%	343,431		220,894		55.5	%
Wireless subscribers EOP ^{(A) (C)}	7,125,266		6,707,269		6.2	%	7,125,266		6,707,269		6.2	%
Postpaid	5,384,661		4,966,061		8.4	%	5,384,661		4,966,061		8.4	%
Average revenue per unit (ARPU) ^(B)($/month)	53.54		52.13		2.7	%	51.93		51.90		0.1	%
Prepaid	18.85		18.36		2.7	%	18.02		16.83		7.1	%
Postpaid	65.04		64.09		1.5	%	63.50		63.00		0.8	%
Churn (%) ^(B)(average per month)	1.9	%	1.8	%	(0.1	) pts	1.9	%	1.7	%	(0.2	) pts
Prepaid	3.4	%	3.5	%	0.1	pts	3.4	%	3.2	%	(0.2	) pts
Postpaid	1.4	%	1.3	%	(0.1	) pts	1.3	%	1.3	%	0.0	pts
Usage per subscriber ^{(B) (C)}(min/month)	280		291		(3.8	%)	272		290		(6.2	%)
Cost of acquisition (COA) ^{(8) (B)}($/sub)	392		320		(22.5	%)	377		352		(7.1	%)
PRO FORMA ^(D)
Average revenue per unit (ARPU) ^(D)($/month)	53.54		52.13		2.7	%	51.93		50.80		2.2	%
Prepaid	18.85		18.36		2.7	%	18.02		17.22		4.6	%
Postpaid	65.04		64.09		1.5	%	63.50		62.91		0.9	%
Churn (%) ^(D)(average per month)	1.9	%	1.8	%	(0.1	) pts	1.9	%	1.8	%	(0.1	) pts
Prepaid	3.4	%	3.5	%	0.1	pts	3.4	%	3.3	%	(0.1	) pts
Postpaid	1.4	%	1.3	%	(0.1	) pts	1.3	%	1.3	%	0.0	pts
Usage per subscriber ^{(C) (D)}(min/month)	280		291		(3.8	%)	272		284		(4.2	%)
Cost of acquisition (COA) ^{(8) (D)}($/sub)	392		320		(22.5	%)	377		340		(10.9	%)

(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 – Third Quarter 2010 Page 8

Bell Wireless – Historical Trend

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

Revenue
Service	3,330		1,160		1,114		1,056		4,102		1,055		1,056		1,005		986
Product	273		103		84		86		405		129		106		88		82
Total external Bell Wireless revenues	3,603		1,263		1,198		1,142		4,507		1,184		1,162		1,093		1,068
Inter-segment revenues	34		11		12		11		51		14		16		11		10
Total Bell Wireless operating revenues	3,637		1,274		1,210		1,153		4,558		1,198		1,178		1,104		1,078
Operating expenses	(2,301	)	(807	)	(753	)	(741	)	(2,746	)	(763	)	(703	)	(636	)	(644	)
EBITDA	1,336		467		457		412		1,812		435		475		468		434
EBITDA margin (Total revenues)	*36.7*	%	*36.7*	%	37.8	%	35.7	%	39.8	%	36.3	%	40.3	%	42.4	%	40.3	%
EBITDA margin (Service revenues)	*40.1*	%	*40.3*	%	41.0	%	39.0	%	44.2	%	41.2	%	45.0	%	46.6	%	44.0	%
Operating Income	923		333		319		271		1,284		292		354		338		300

Capital expenditures	256		121		83		52		673		142		177		224		130
Capital intensity	*7.0*	%	*9.5*	%	6.9	%	4.5	%	14.8	%	11.9	%	15.0	%	20.3	%	12.1	%

Wireless gross activations ^(A)	1,446,768		537,295		480,639		428,834		1,794,237		523,739		500,895		403,751		365,852
Postpaid	933,045		368,154		300,579		264,312		1,056,126		300,233		301,876		243,886		210,131
Wireless net activations ^(A)	291,964		137,880		98,459		55,625		372,607		162,859		134,737		44,716		30,295
Postpaid	343,431		159,465		102,754		81,212		330,815		109,921		121,692		64,181		35,021
Wireless subscribers EOP^{(A) (C)}	7,125,266		7,125,266		6,987,386		6,888,927		6,833,302		6,833,302		6,707,269		6,572,532		6,527,816
Postpaid	5,384,661		5,384,661		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)($/month)	51.93		53.54		52.12		50.07		51.70		51.08		52.13		52.05		51.52
Prepaid	18.02		18.85		18.35		16.87		17.15		18.45		18.36		16.41		15.38
Postpaid	63.50		65.04		63.66		61.72		62.87		62.47		64.09		62.58		62.34
Churn (%) ^(B)(average per month)	1.9	%	1.9	%	1.8	%	1.8	%	1.7	%	1.8	%	1.8	%	1.7	%	1.6	%
Prepaid	3.4	%	3.4	%	3.4	%	3.4	%	3.2	%	3.2	%	3.5	%	3.3	%	2.9	%
Postpaid	1.3	%	1.4	%	1.3	%	1.2	%	1.3	%	1.3	%	1.3	%	1.3	%	1.2	%
Usage per subscriber ^{(B) (C)}(min/month)	272		280		284		259		287		281		291		299		279
Cost of acquisition (COA) ^(B)($/sub)	377		392		374		362		350		327		320		356		397
PRO FORMA ^(D)
Average revenue per unit (ARPU)^(D)($/month)	51.93		53.54		52.12		50.07		50.88		51.08		52.13		50.46		49.84
Prepaid	18.02		18.85		18.35		16.87		17.53		18.45		18.36		17.26		16.05
Postpaid	63.50		65.04		63.66		61.72		62.81		62.47		64.09		62.48		62.24
Churn (%) ^(D)(average per month)	1.9	%	1.9	%	1.8	%	1.8	%	1.8	%	1.8	%	1.8	%	1.8	%	1.7	%
Prepaid	3.4	%	3.4	%	3.4	%	3.4	%	3.2	%	3.2	%	3.5	%	3.3	%	3.0	%
Postpaid	1.3	%	1.4	%	1.3	%	1.2	%	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%
Usage per subscriber ^{(C) (D)}(min/month)	272		280		284		259		283		281		291		290		271
Cost of acquisition (COA) ^(D)($/sub)	377		392		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 – Third Quarter 2010 Page 9

BCE Inc.
Net debt and other information ⁽²⁾

BCE Inc. – Net debt and preferreds

At September 30, 2010			BCE Inc.
(unaudited)
($ millions, except where otherwise indicated)
			Bell
	Bell		Aliant		BCE Inc.
Debt due within one year	527		612		1,139
Long-term debt	7,535		2,364		9,899
Securitization of accounts receivable	1,140		150		1,290
Preferred shares – BCE	2,770		–		2,770
Cash and cash equivalents	(1,170	)	(15	)	(1,185	)
Net debt	10,802		3,111		13,913

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

Debt due within one year	527		511		580		543
Long-term debt	7,535		7,533		7,543		7,541
Securitization of accounts receivable	1,140		1,136		1,140		1,140
Preferred shares – BCE	2,770		2,770		2,770		2,770
Cash and cash equivalents	(1,170	)	(916	)	(730	)	(660	)
Net Debt	10,802		11,034		11,303		11,334

Net Debt: Trailing 12 month EBITDA, including Bell Aliant distributions to BCE	1.76		1.81		1.87		1.89
EBITDA, including Bell Aliant distributions to BCE: Net interest, securitization costs and preferred dividends (trailing 12 months)	9.61		9.42		9.17		8.79

Cash Flow Information
(unaudited)	Q3		Q3						YTD		YTD
($ millions, except where otherwise indicated)	2010		2009		$ change		% change		2010		2009		$ change		% change

Free Cash Flow (FCF)
Cash from operating activities	1,422		1,230		192		15.6	%	3,466		3,134		332		10.6	%
Capital expenditures	(634	)	(589	)	(45	)	(7.6	%)	(1,603	)	(1,750	)	147		8.4	%
Other investing activities	(24	)	(39	)	15		38.5	%	(78	)	(81	)	3		3.7	%
Dividends paid on preferred shares	(25	)	(26	)	1		3.8	%	(80	)	(81	)	1		1.2	%
Bell Aliant distributions to BCE	73		73		–		–		218		219		(1	)	(0.5	%)
FCF	812		649		163		25.1	%	1,923		1,441		482		33.4	%

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

Free Cash Flow (FCF)
Cash from operating activities	3,466		1,422		1,091		953		3,755		621		1,230		1,181		723
Capital expenditures	(1,603	)	(634	)	(538	)	(431	)	(2,390	)	(640	)	(589	)	(679	)	(482	)
Other investing activities	(78	)	(24	)	(32	)	(22	)	(93	)	(12	)	(39	)	(28	)	(14	)
Dividends paid on preferred shares	(80	)	(25	)	(27	)	(28	)	(107	)	(26	)	(26	)	(27	)	(28	)
Bell Aliant distributions to BCE	218		73		72		73		291		72		73		73		73
FCF	1,923		812		566		545		1,456		15		649		520		272

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

BCE Inc.
Consolidated Balance Sheet Data

	September 30		June 30		March 31		December 31
($ millions, except where otherwise indicated) (unaudited)	2010		2010		2010		2009
*ASSETS*
Current assets
Cash and cash equivalents	1,185		928		748		687
Accounts receivable	1,475		1,375		1,523		1,605
Future income taxes	143		176		128		110
Inventory	459		417		446		448
Prepaid expenses	308		369		389		296
Other current assets	190		162		145		137
Current assets of discontinued operations	1		1		1		1
Total current assets	3,761		3,428		3,380		3,284
Capital assets
Property, plant and equipment	19,444		19,368		19,381		19,441
Finite-life intangible assets	2,361		2,415		2,483		2,541
Indefinite-life intangible assets	3,885		3,861		3,817		3,803
Total capital assets	25,690		25,644		25,681		25,785
Other long-term assets	3,214		3,175		3,126		3,207
Goodwill	5,771		5,771		5,774		5,774
Total assets	38,436		38,018		37,961		38,050
*LIABILITIES*
Current liabilities
Accounts payable and accrued liabilities	3,962		3,541		3,568		3,716
Interest payable	129		108		133		113
Dividends payable	388		373		375		354
Debt due within one year	1,139		670		747		600
Current liabilities of discontinued operations	4		4		3		3
Total current liabilities	5,622		4,696		4,826		4,786
Long-term debt	9,899		10,292		10,301		10,299
Other long-term liabilities	4,647		4,808		4,808		4,942
Total liabilities	20,168		19,796		19,935		20,027
Non-controlling interest	1,013		1,023		1,031		1,049
*SHAREHOLDERS’ EQUITY*
Preferred shares	2,770		2,770		2,770		2,770
Common shareholders’ equity
Common shares	12,741		12,790		12,851		12,921
Contributed surplus	2,473		2,479		2,485		2,490
Accumulated other comprehensive income	1		20		(38	)	92
Deficit	(730	)	(860	)	(1,073	)	(1,299	)
Total common shareholders’ equity	14,485		14,429		14,225		14,204
Total shareholders’ equity	17,255		17,199		16,995		16,974
Total liabilities and shareholders’ equity	38,436		38,018		37,961		38,050
Number of common shares outstanding	755.6		759.1		763.0		767.2

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

BCE Inc.
Consolidated Cash Flow Data

		Q3			Q3						YTD			YTD
($ millions, except where otherwise indicated) (unaudited)		2010			2009			$ change			2010			2009			$ change
Cash flows from operating activities
Net earnings		555			584			(29	)		1,809			1,362			447
Less: Losses from discontinued operations, net of income taxes and non-controlling interest		–			–			–			–			(10	)		10
Earnings from continuing operations		555			584			(29	)		1,809			1,372			437
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities
Depreciation and amortization of intangible assets		828			828			–			2,436			2,467			(31	)
Net benefit plans cost		65			86			(21	)		159			262			(103	)
Restructuring and other		135			191			(56	)		172			445			(273	)
Gains on investments		(1	)		(36	)		35			(136	)		(38	)		(98	)
Future income taxes		(32	)		(228	)		196			(26	)		(246	)		220
Non-controlling interest		79			90			(11	)		238			254			(16	)
Contributions to employee pension plans		(115	)		(99	)		(16	)		(414	)		(283	)		(131	)
Other employee future benefit plan payments		(25	)		(25	)		–			(73	)		(72	)		(1	)
Payments of restructuring and other		(35	)		(70	)		35			(178	)		(252	)		74
Operating assets and liabilities		216			216			–			169			27			142
Cash flows from operating activities		1,670			1,537			133			4,156			3,936			220
Bell Aliant distributions to BCE		73			73			–			218			219			(1	)
Capital expenditures		(748	)		(704	)		(44	)		(1,937	)		(2,094	)		157
Other investing activities		(24	)		(38	)		14			(76	)		(78	)		2
Cash dividends paid on preferred shares		(25	)		(26	)		1			(80	)		(81	)		1
Cash distributions paid by subsidiaries to non-controlling interest		(92	)		(93	)		1			(277	)		(277	)		–
Bell Aliant Free Cash Flow		(42	)		(100	)		58			(81	)		(184	)		103
Free Cash Flow ⁽³⁾		812			649			163			1,923			1,441			482
Bell Aliant undistributed Free Cash Flow		(31	)		27			(58	)		(137	)		(35	)		(102	)
Business acquisitions		–			(313	)		313			13			(334	)		347
Business dispositions		–			10			(10	)		8			10			(2	)
Going-private costs		–			–			–			–			(7	)		7
Increase in investments		–			(2	)		2			(3	)		(3	)		–
Decrease in investments		6			55			(49	)		139			55			84
Increase (decrease) in notes payable and bank advances		33			(5	)		38			147			(155	)		302
Issue of long-term debt		350			–			350			350			1,348			(998	)
Repayment of long-term debt		(404	)		(656	)		252			(635	)		(2,336	)		1,701
Cash dividends paid on common shares		(329	)		(296	)		(33	)		(972	)		(891	)		(81	)
Issue of common shares		15			–			15			28			2			26
Repurchase of common shares		(125	)		–			(125	)		(375	)		(894	)		519
Other financing activities		(70	)		(38	)		(32	)		11			(79	)		90
		(555	)		(1,218	)		663			(1,426	)		(3,319	)		1,893
Cash flows from (used in) continuing operations		257			(569	)		826			497			(1,878	)		2,375
Cash flows (used in) from discontinued operations activities		–			(2	)		2			1			(7	)		8
Cash flows (used in) from discontinued investing activities		–			(6	)		6			–			11			(11	)
Net increase (decrease) in cash and cash equivalents		257			(577	)		834			498			(1,874	)		2,372
Cash and cash equivalents at beginning of period		929			1,766			(837	)		688			3,063			(2,375	)
Cash and cash equivalents at end of period		1,186			1,189			(3	)		1,186			1,189			(3	)
Consists of:
Cash and cash equivalents of continuing operations		1,185			1,187			(2	)		1,185			1,187			(2	)
Cash and cash equivalents of discontinued operations		1			2			(1	)		1			2			(1	)
Total		1,186			1,189			(3	)		1,186			1,189			(3	)

Other information
Cash flow per share ⁽⁹⁾	$	1.22		$	1.08		$	0.14		$	2.92		$	2.38		$	0.54
Annualized cash flow yield ⁽¹⁰⁾		7.6	%		10.3	%		(2.7	) pts		7.6	%		10.3	%		(2.7	) pts
Common dividend payout ⁽¹¹⁾		55.9	%		48.2	%		7.7	pts		59.3	%		59.0	%		0.3	pts

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

BCE Inc.
Consolidated Cash Flow Data – Historical Trend

($ millions, except where otherwise indicated) (unaudited)		YTD 2010			Q3 10			Q2 10			Q1 10			Total 2009			Q4 09			Q3 09			Q2 09			Q1 09
Cash flows from operating activities
Net earnings		1,809			555			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		1,809			555			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		2,436			828			815			793			3,371			904			828			821			818
Net benefit plans cost		159			65			66			28			355			93			86			88			88
Restructuring and other		172			135			8			29			527			82			191			146			108
Gains on investments		(136	)		(1	)		(10	)		(125	)		(49	)		(11	)		(36	)		–			(2	)
Future income taxes		(26	)		(32	)		(18	)		24			32			278			(228	)		(5	)		(13	)
Non-controlling interest		238			79			83			76			333			79			90			80			84
Contributions to employee pension plans		(414	)		(115	)		(144	)		(155	)		(1,068	)		(785	)		(99	)		(92	)		(92	)
Other employee future benefit plan payments		(73	)		(25	)		(24	)		(24	)		(96	)		(24	)		(25	)		(23	)		(24	)
Payments of restructuring and other		(178	)		(35	)		(49	)		(94	)		(310	)		(58	)		(70	)		(105	)		(77	)
Operating assets and liabilities		169			216			44			(91	)		40			13			216			188			(377	)
Cash flows from operating activities		4,156			1,670			1,388			1,098			4,884			948			1,537			1,474			925
Bell Aliant distributions to BCE		218			73			72			73			291			72			73			73			73
Capital expenditures		(1,937	)		(748	)		(663	)		(526	)		(2,854	)		(760	)		(704	)		(800	)		(590	)
Other investing activities		(76	)		(24	)		(31	)		(21	)		(89	)		(11	)		(38	)		(27	)		(13	)
Cash dividends paid on preferred shares		(80	)		(25	)		(27	)		(28	)		(107	)		(26	)		(26	)		(27	)		(28	)
Cash distributions paid by subsidiaries to non-controlling interest		(277	)		(92	)		(93	)		(92	)		(369	)		(92	)		(93	)		(92	)		(92	)
Bell Aliant Free Cash Flow		(81	)		(42	)		(80	)		41			(300	)		(116	)		(100	)		(81	)		(3	)
Free Cash Flow		1,923			812			566			545			1,456			15			649			520			272
Bell Aliant undistributed Free Cash Flow		(137	)		(31	)		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		139			6			123			10			113			58			55			–			–
Increase (decrease) in notes payable and bank advances		147			33			2			112			(194	)		(39	)		(5	)		(238	)		88
Issue of long-term debt		350			350			–			–			1,348			–			–			1,348			–
Repayment of long-term debt		(635	)		(404	)		(175	)		(56	)		(2,539	)		(203	)		(656	)		(1,586	)		(94	)
Cash dividends paid on common shares		(972	)		(329	)		(333	)		(310	)		(1,201	)		(310	)		(296	)		(301	)		(294	)
Issue of common shares		28			15			12			1			2			–			–			1			1
Repurchase of common shares		(375	)		(125	)		(125	)		(125	)		(894	)		–			–			(337	)		(557	)
Other financing activities		11			(70	)		92			(11	)		(90	)		(11	)		(38	)		(31	)		(10	)
		(1,426	)		(555	)		(387	)		(484	)		(3,833	)		(514	)		(1,218	)		(1,139	)		(962	)
Cash flows from (used in) continuing operations		497			257			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		498			257			180			61			(2,375	)		(501	)		(577	)		(599	)		(698	)
Cash and cash equivalents at beginning of period		688			929			749			688			3,063			1,189			1,766			2,365			3,063
Cash and cash equivalents at end of period		1,186			1,186			929			749			688			688			1,189			1,766			2,365
Consists of:
Cash and cash equivalents of continuing operations		1,185			1,185			928			748			687			687			1,187			1,761			2,356
Cash and cash equivalents of discontinued operations		1			1			1			1			1			1			2			5			9
Total		1,186			1,186			929			749			688			688			1,189			1,766			2,365

Other information
Cash flow per share	$	2.92		$	1.22		$	0.95		$	0.75		$	2.63		$	0.25		$	1.08		$	0.88		$	0.42
Annualized cash flow yield		7.6	%		7.6	%		7.5	%		7.6	%		6.5	%		6.5	%		10.3	%		8.3	%		8.5	%
Common dividend payout		59.3	%		55.9	%		56.5	%		66.9	%		63.2	%		79.4	%		48.2	%		66.4	%		67.5	%

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