EX-99.2 3 supp_q312.htm SUPPLEMENTARY FINANCIAL INFORMATION - THIRD QUARTER 2012 Supplementary Financial Information

EXHIBIT 99.2

 

 

BCE Inc. (1)
Consolidated Operational Data

($ millions of Canadian dollars, except per share amounts) (unaudited)

   Q3
2012		     Q3
2011		       $ change   % change       YTD
2012		     YTD
2011		       $ change   % change  

Operating revenues

   4,982     4,910       72   1.5 %     14,814     14,331       483   3.4 %

Operating costs (A)

   (2,926 )   (2,907 )     (19 ) (0.7 %)     (8,662 )   (8,389 )     (273 ) (3.3 %)

Employee benefit plans service cost

   (37 )   (62 )     25   40.3 %     (165 )   (182 )     17   9.3 %

EBITDA (3)

   2,019     1,941       78   4.0 %     5,987     5,760       227   3.9 %

EBITDA margin (4)

  

40.5

 %  

39.5

 %        

1.0

  pts    

40.4

 %  

40.2

 %        

0.2

  pts

Severance, acquisition and other costs

   (24 )   (130 )     106   81.5 %     (63 )   (410 )     347   84.6 %

Depreciation

   (674 )   (628 )     (46 ) (7.3 %)     (1,982 )   (1,877 )     (105 ) (5.6 %)

Amortization

   (180 )   (180 )     -   0.0 %     (539 )   (542 )     3   0.6 %

Finance costs

                                                  

Interest expense

   (223 )   (210 )     (13 ) (6.2 %)     (633 )   (627 )     (6 ) (1.0 %)

Interest on employee benefit obligations

   (243 )   (247 )     4   1.6 %     (728 )   (736 )     8   1.1 %

Expected return on pension plan assets

   267     259       8   3.1 %     802     772       30   3.9 %

Other (expense) income

   (5 )   11       (16 ) n.m.       28     134       (106 ) (79.1 %)

Earnings before income taxes

   937     816       121   14.8 %     2,872     2,474       398   16.1 %

Income taxes

   (248 )   (80 )     (168 ) n.m.       (628 )   (473 )     (155 ) (32.8 %)

Net earnings

   689     736       (47 ) (6.4 %)     2,244     2,001       243   12.1 %

Net earnings attributable to:

                                                  

Common shareholders

   569     642       (73 ) (11.4 %)     1,916     1,735       181   10.4 %

Preferred shareholders

   36     33       3   9.1 %     105     93       12   12.9 %

Non-controlling interest

   84     61       23   37.7 %     223     173       50   28.9 %

Net earnings

   689     736       (47 ) (6.4 %)     2,244     2,001       243   12.1 %

Net earnings per common share - basic

 $ 0.74   $ 0.83     $ (0.09 ) (10.8 %)   $ 2.48   $ 2.26     $ 0.22   9.7 %

Net earnings per common share - diluted

 $ 0.74   $ 0.83     $ (0.09 ) (10.8 %)   $ 2.48   $ 2.26     $ 0.22   9.7 %

Dividends per common share

 $ 0.5675   $ 0.5175     $ 0.050   9.7 %   $ 1.6525   $ 1.5275     $ 0.125   8.2 %

Average number of common shares outstanding - basic (millions)

   774.2     777.6                   774.1     769.1              

Average number of common shares outstanding - diluted (millions)

   774.8     778.2                   774.5     769.5              

Number of common shares outstanding (millions)

   774.6     778.0                   774.6     778.0              
                                                   

Adjusted Net Earnings and EPS

                                                  

Net earnings attributable to common shareholders

   569     642       (73 ) (11.4 %)     1,916     1,735       181   10.4 %

Severance, acquisition and other costs

   19     82       (63 ) (76.8 %)     48     284       (236 ) (83.1 %)

Net gains on investments

   -     -       -   0.0 %     (8 )   (89 )     81   91.0 %

Adjusted net earnings attributable to common shareholders (3)

   588     724       (136 ) (18.8 %)     1,956     1,930       26   1.3 %

Impact on net earnings per share

 $ 0.02   $ 0.10     $ (0.08 ) (80.0 %)   $ 0.05   $ 0.25     $ (0.20 ) (80.0 %)

Adjusted EPS (3)

 $ 0.76   $ 0.93     $ (0.17 ) (18.3 %)   $ 2.53   $ 2.51     $ 0.02   0.8 %
                                                   

 

(A)

Excludes employee benefit plans service cost

n.m. : not meaningful

 

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 2

BCE Inc.
Consolidated Operational Data - Historical Trend

($ millions of Canadian dollars, except per share amounts) (unaudited)

   YTD
2012		     Q3 12     Q2 12     Q1 12       Total
2011		       Q4 11     Q3 11     Q2 11     Q1 11  

Operating revenues

   14,814     4,982     4,923     4,909       19,497       5,166     4,910     4,955     4,466  

Operating costs (A)

   (8,662 )   (2,926 )   (2,820 )   (2,916 )     (11,627 )     (3,238 )   (2,907 )   (2,908 )   (2,574 )

Employee benefit plans service cost

   (165 )   (37 )   (62 )   (66 )     (241 )     (59 )   (62 )   (61 )   (59 )

EBITDA

   5,987     2,019     2,041     1,927       7,629       1,869     1,941     1,986     1,833  

EBITDA margin

  

40.4

 %  

40.5

 %  

41.5

 %  

39.3

 %    

39.1

 %    

36.2

 %  

39.5

 %  

40.1

 %  

41.0

 %

Severance, acquisition and other costs

   (63 )   (24 )   (20 )   (19 )     (409 )     1     (130 )   (219 )   (61 )

Depreciation

   (1,982 )   (674 )   (664 )   (644 )     (2,538 )     (661 )   (628 )   (638 )   (611 )

Amortization

   (539 )   (180 )   (178 )   (181 )     (723 )     (181 )   (180 )   (183 )   (179 )

Finance costs

                                                          

Interest expense

   (633 )   (223 )   (206 )   (204 )     (842 )     (215 )   (210 )   (226 )   (191 )

Interest on employee benefit obligations

   (728 )   (243 )   (242 )   (243 )     (984 )     (248 )   (247 )   (247 )   (242 )

Expected return on pension plan assets

   802     267     268     267       1,032       260     259     259     254  

Other income (expense)

   28     (5 )   53     (20 )     129       (5 )   11     145     (22 )

Earnings before income taxes

   2,872     937     1,052     883       3,294       820     816     877     781  

Income taxes

   (628 )   (248 )   (173 )   (207 )     (720 )     (247 )   (80 )   (194 )   (199 )

Net earnings

   2,244     689     879     676       2,574       573     736     683     582  

Net earnings attributable to:

                                                          

Common shareholders

   1,916     569     773     574       2,221       486     642     590     503  

Preferred shareholders

   105     36     34     35       119       26     33     31     29  

Non-controlling interest

   223     84     72     67       234       61     61     62     50  

Net earnings

   2,244     689     879     676       2,574       573     736     683     582  

Net earnings per common share - basic

 $ 2.48   $ 0.74   $ 1.00   $ 0.74     $ 2.88     $ 0.62   $ 0.83   $ 0.76   $ 0.67  

Net earnings per common share - diluted

 $ 2.48   $ 0.74   $ 1.00   $ 0.74     $ 2.88     $ 0.62   $ 0.83   $ 0.76   $ 0.67  

Dividends per common share

 $ 1.6525   $ 0.5675   $ 0.5425   $ 0.5425     $ 2.0450     $ 0.5175   $ 0.5175   $ 0.5175   $ 0.4925  

Average number of common shares outstanding - basic (millions)

   774.1     774.2     773.7     774.3       771.4       778.1     777.6     776.6     752.9  

Average number of common shares outstanding - diluted (millions)

   774.5     774.8     774.0     774.7       771.8       778.7     778.2     777.1     753.5  

Number of common shares outstanding (millions)

   774.6     774.6     773.9     773.6       775.4       775.4     778.0     777.5     754.1  

Adjusted Net Earnings and EPS

                                                          

Net earnings attributable to common shareholders

   1,916     569     773     574       2,221       486     642     590     503  

Severance, acquisition and other costs

   48     19     15     14       282       (2 )   82     162     40  

Net gains on investments

   (8 )   -     -     (8 )     (89 )     -     -     (89 )   -  

Adjusted net earnings attributable to common shareholders

   1,956     588     788     580       2,414       484     724     663     543  

Impact on net earnings per share

 $ 0.05   $ 0.02   $ 0.02   $ 0.01     $ 0.25     $ -   $ 0.10   $ 0.10   $ 0.05  

Adjusted EPS

 $ 2.53   $ 0.76   $ 1.02   $ 0.75     $ 3.13     $ 0.62   $ 0.93   $ 0.86   $ 0.72  

 

(A)

Excludes employee benefit plans service cost

 

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 3

BCE Inc.
Segmented Data (2)

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 Q3
2012		     Q3
2011		    

  $ change

    

% change

     YTD
2012		     YTD
2011		    

  $ change

  

  % change

  
                                             

Revenues

                                            

Bell Wireline

 2,505     2,610     (105 )   (4.0 %)   7,612     7,912     (300 ) (3.8 %)

Bell Wireless

 1,434     1,339     95     7.1 %   4,115     3,866     249   6.4 %

Bell Media

 546     435     111     25.5 %   1,592     964     628   65.1 %

Inter-segment eliminations

 (93 )   (71 )   (22 )   (31.0 %)   (254 )   (185 )   (69 ) (37.3 %)

Total Bell

 4,392     4,313     79     1.8 %   13,065     12,557     508   4.0 %

Bell Aliant

 698     700     (2 )   (0.3 %)   2,067     2,074     (7 ) (0.3 %)

Inter-segment eliminations

 (108 )   (103 )   (5 )   (4.9 %)   (318 )   (300 )   (18 ) (6.0 %)

Total BCE Inc.

4,982

 

 

4,910

 

 

72

 

 

1.5

%

 

14,814

 

 

14,331

 

 

483

 

3.4

%
                                             

Operating costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

 (1,527 )   (1,567 )   40     2.6 %   (4,623 )   (4,754 )   131   2.8 %

Bell Wireless

 (880 )   (858 )   (22 )   (2.6 %)   (2,484 )   (2,464 )   (20 ) (0.8 %)

Bell Media

 (390 )   (354 )   (36 )   (10.2 %)   (1,203 )   (760 )   (443 ) (58.3 %)

Inter-segment eliminations

 93     71     22     31.0 %   254     185     69   37.3 %

Total Bell

(2,704

)

 

(2,708

)

 

4

 

 

0.1

%

 

(8,056

)

 

(7,793

)

 

(263

)

(3.4

%)

Bell Aliant

 (367 )   (364 )   (3 )   (0.8 %)   (1,089 )   (1,078 )   (11 ) (1.0 %)

Inter-segment eliminations

 108     103     5     4.9 %   318     300     18   6.0 %

Total BCE Inc.

(2,963

)

 

(2,969

)

 

6

 

 

0.2

%

 

(8,827

)

 

(8,571

)

 

(256

)

(3.0

%)
                                             

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

 978     1,043     (65 )   (6.2 %)   2,989     3,158     (169 ) (5.4 %)

Margin

39.0

 %  

40.0

 %        

(1.0

 ) pts  

39.3

 %  

39.9

 %      

(0.6

 ) pts

Bell Wireless

 554     481     73     15.2 %   1,631     1,402     229   16.3 %

Margin

38.6

 %  

35.9

 %        

2.7

  pts  

39.6

 %  

36.3

 %      

3.3

  pts

Bell Media

 156     81     75     92.6 %   389     204     185   90.7 %

Margin

28.6

 %  

18.6

 %        

10.0

  pts  

24.4

 %  

21.2

 %      

3.2

  pts

Total Bell

1,688

 

 

1,605

 

 

83

 

 

5.2

%

 

5,009

 

 

4,764

 

 

245

 

5.1

%

Margin

38.4

 %  

37.2

 %        

1.2

  pts  

38.3

 %  

37.9

 %      

0.4

  pts

Bell Aliant

 331     336     (5 )   (1.5 %)   978     996     (18 ) (1.8 %)

Margin

47.4

 %  

48.0

 %        

(0.6

 ) pts  

47.3

 %  

48.0

 %      

(0.7

 ) pts

Total BCE Inc.

2,019

 

 

1,941

 

 

78

 

 

4.0

%

 

5,987

 

 

5,760

 

 

227

 

3.9

%

Margin

40.5

 %  

39.5

 %        

1.0

  pts  

40.4

 %  

40.2

 %      

0.2

  pts
                                             

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

 514     474     (40 )   (8.4 %)   1,632     1,326     (306 ) (23.1 %)

Capital Intensity (5)

20.5

 %  

18.2

 %        

(2.3

 ) pts  

21.4

 %  

16.8

 %      

(4.6

 ) pts

Bell Wireless

 152     150     (2 )   (1.3 %)   460     431     (29 ) (6.7 %)

Capital Intensity

10.6

 %  

11.2

 %        

0.6

  pts  

11.2

 %  

11.1

 %      

(0.1

 ) pts

Bell Media

 22     28     6     21.4 %   52     55     3   5.5 %

Capital Intensity

4.0

 %  

6.4

 %        

2.4

  pts  

3.3

 %  

5.7

 %      

2.4

  pts

Total Bell

688

 

 

652

 

 

(36

)

 

(5.5

%)

 

2,144

 

 

1,812

 

 

(332

)

(18.3

%)

Capital Intensity

15.7

 %  

15.1

 %        

(0.6

 ) pts  

16.4

 %  

14.4

 %      

(2.0

 ) pts

Bell Aliant

 144     162     18     11.1 %   457     436     (21 ) (4.8 %)

Capital Intensity

20.6

 %  

23.1

 %        

2.5

  pts  

22.1

 %  

21.0

 %      

(1.1

 ) pts

Total BCE Inc.

832

 

 

814

 

 

(18

)

 

(2.2

%)

 

2,601

 

 

2,248

 

 

(353

)

(15.7

%)

Capital Intensity

16.7

 %  

16.6

 %        

(0.1

 ) pts  

17.6

 %  

15.7

 %      

(1.9

 ) pts

 

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 4

BCE Inc.
Segmented Data - Historical Trend

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 YTD
2012		    

  Q3 12

  

  Q2 12

  

  Q1 12

     Total
2011		    

  Q4 11

  

  Q3 11

  

  Q2 11

  

  Q1 11

  
                                           

Revenues

                                          

Bell Wireline

 7,612     2,505   2,528   2,579     10,621     2,709   2,610   2,630   2,672  

Bell Wireless

 4,115     1,434   1,361   1,320     5,231     1,365   1,339   1,276   1,251  

Bell Media

 1,592     546   534   512     1,542     578   435   529   -  

Inter-segment eliminations

 (254 )   (93 ) (83 ) (78 )   (261 )   (76 ) (71 ) (73 ) (41 )

Total Bell

 13,065     4,392   4,340   4,333     17,133     4,576   4,313   4,362   3,882  

Bell Aliant

 2,067     698   687   682     2,775     701   700   692   682  

Inter-segment eliminations

 (318 )   (108 ) (104 ) (106 )   (411 )   (111 ) (103 ) (99 ) (98 )

Total BCE Inc.

 14,814     4,982   4,923   4,909     19,497     5,166   4,910   4,955   4,466  
                                           

Operating costs

                                          

Bell Wireline

 (4,623 )   (1,527 ) (1,520 ) (1,576 )   (6,466 )   (1,712 ) (1,567 ) (1,559 ) (1,628 )

Bell Wireless

 (2,484 )   (880 ) (805 ) (799 )   (3,408 )   (944 ) (858 ) (816 ) (790 )

Bell Media

 (1,203 )   (390 ) (382 ) (431 )   (1,208 )   (448 ) (354 ) (406 ) -  

Inter-segment eliminations

 254     93   83   78     261     76   71   73   41  

Total Bell

 (8,056 )   (2,704 ) (2,624 ) (2,728 )   (10,821 )   (3,028 ) (2,708 ) (2,708 ) (2,377 )

Bell Aliant

 (1,089 )   (367 ) (362 ) (360 )   (1,458 )   (380 ) (364 ) (360 ) (354 )

Inter-segment eliminations

 318     108   104   106     411     111   103   99   98  

Total BCE Inc.

 (8,827 )   (2,963 ) (2,882 ) (2,982 )   (11,868 )   (3,297 ) (2,969 ) (2,969 ) (2,633 )
                                           

EBITDA

                                          

Bell Wireline

 2,989     978   1,008   1,003     4,155     997   1,043   1,071   1,044  

Margin

39.3

 %  

39.0

 %

39.9

 %

38.9

 %  

39.1

 %  

36.8

 %

40.0

 %

40.7

 %

39.1

 %

Bell Wireless

 1,631     554   556   521     1,823     421   481   460   461  

Margin

39.6

 %  

38.6

 %

40.9

 %

39.5

 %  

34.8

 %  

30.8

 %

35.9

 %

36.1

 %

36.9

 %

Bell Media

 389     156   152   81     334     130   81   123   -  

Margin

24.4

 %  

28.6

 %

28.5

 %

15.8

 %  

21.7

 %  

22.5

 %

18.6

 %

23.3

 %

n.m.

  

Total Bell

 5,009     1,688   1,716   1,605     6,312     1,548   1,605   1,654   1,505  

Margin

38.3

 %  

38.4

 %

39.5

 %

37.0

 %  

36.8

 %  

33.8

 %

37.2

 %

37.9

 %

38.8

 %

Bell Aliant

 978     331   325   322     1,317     321   336   332   328  

Margin

47.3

 %  

47.4

 %

47.3

 %

47.2

 %  

47.5

 %  

45.8

 %

48.0

 %

48.0

 %

48.1

 %

Total BCE Inc.

 5,987     2,019   2,041   1,927     7,629     1,869   1,941   1,986   1,833  

Margin

40.4

 %  

40.5

 %

41.5

 %

39.3

 %  

39.1

 %  

36.2

 %

39.5

 %

40.1

 %

41.0

 %
                                           

Capital expenditures

                                          

Bell Wireline

 1,632     514   586   532     1,973     647   474   450   402  

Capital Intensity

21.4

 %  

20.5

 %

23.2

 %

20.6

 %  

18.6

 %  

23.9

 %

18.2

 %

17.1

 %

15.0

 %

Bell Wireless

 460     152   172   136     619     188   150   168   113  

Capital Intensity

11.2

 %  

10.6

 %

12.6

 %

10.3

 %  

11.8

 %  

13.8

 %

11.2

 %

13.2

 %

9.0

 %

Bell Media

 52     22   18   12     91     36   28   27   -  

Capital Intensity

3.3

 %  

4.0

 %

3.4

 %

2.3

 %  

5.9

 %  

6.2

 %

6.4

 %

5.1

 %

n.m.

  

Total Bell

 2,144     688   776   680     2,683     871   652   645   515  

Capital Intensity

16.4

 %  

15.7

 %

17.9

 %

15.7

 %  

15.7

 %  

19.0

 %

15.1

 %

14.8

 %

13.3

 %

Bell Aliant

 457     144   176   137     573     137   162   155   119  

Capital Intensity

22.1

 %  

20.6

 %

25.6

 %

20.1

 %  

20.6

 %  

19.5

 %

23.1

 %

22.4

 %

17.4

 %

Total BCE Inc.

 2,601     832   952   817     3,256     1,008   814   800   634  

Capital Intensity

17.6

 %  

16.7

 %

19.3

 %

16.6

 %  

16.7

 %  

19.5

 %

16.6

 %

16.1

 %

14.2

 %

 

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 5

Bell Wireline (2)

 

Q3     Q3           YTD     YTD        

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 2012     2011     % change     2012     2011     % change  

Bell Wireline

                                  

Local & access

 654     710     (7.9 %)   1,997     2,165     (7.8 %)

Long distance

 192     223     (13.9 %)   610     684     (10.8 %)

Data (A)

 1,386     1,384     0.1 %   4,199     4,192     0.2 %

Equipment & other

 195     212     (8.0 %)   572     639     (10.5 %)

Total external revenues

 2,427     2,529     (4.0 %)   7,378     7,680     (3.9 %)

Inter-segment revenues

 78     81     (3.7 %)   234     232     0.9 %

Total Bell Wireline operating revenues

 2,505     2,610     (4.0 %)   7,612     7,912     (3.8 %)

Operating costs

 (1,527 )   (1,567 )   2.6 %   (4,623 )   (4,754 )   2.8 %

EBITDA

 978     1,043     (6.2 %)   2,989     3,158     (5.4 %)

EBITDA Margin

39.0

 %  

40.0

 %  

(1.0

 ) pts  

39.3

 %  

39.9

 %  

(0.6

 ) pts
                                   

Capital expenditures

 514     474     (8.4 %)   1,632     1,326     (23.1 %)

Capital Intensity

20.5

 %  

18.2

 %  

(2.3

 ) pts  

21.4

 %  

16.8

 %  

(4.6

 ) pts

Local

                                  

Network access services (NAS)

                                  

Residential (B)

 3,027,343     3,365,854     (10.1 %)   3,027,343     3,365,854     (10.1 %)

Business

 2,741,266     2,839,482     (3.5 %)   2,741,266     2,839,482     (3.5 %)

Total

 5,768,609     6,205,336     (7.0 %)   5,768,609     6,205,336     (7.0 %)

Network access service net (losses)/activations

                                  

Residential (B)

 (84,540 )   (95,267 )   11.3 %   (248,778 )   (243,033 )   (2.4 %)

Business

 (24,740 )   (15,362 )   (61.0 %)   (84,269 )   (27,336 )   n.m.  

Total

 (109,280 )   (110,629 )   1.2 %   (333,047 )   (270,369 )   (23.2 %)

Internet

                                  

High Speed Internet net activations (losses)

 13,416     (101 )   n.m     25,145     14,335     75.4 %

High Speed Internet subscribers EOP (C) (D)

 2,108,100     2,111,661     (0.2 %)   2,108,100     2,111,661     (0.2 %)

TV

                                  

Net subscriber activations (E)

 15,846     26,169     (39.4 %)   50,227     40,519     24.0 %

Total subscribers EOP (D) (E) (F)

 2,136,765     2,075,877     2.9 %   2,136,765     2,075,877     2.9 %

 

(A)

Starting in Q1 2012, we have included TV service revenues in data revenues to align with the reporting practices of our peers. As a result, we have restated prior period results within Bell Wireline. Our previously reported Wireline segment and consolidated results did not change as a result of this restatement.
(B)

Residential NAS losses in Q2 2012 were increased by 7,692 lines following a review of customer account records.
(C)

At the beginning of 2012, our high-speed Internet subscriber base was reduced by 20,953 customers to reflect the decommissioning of our worldwide interoperability for microwave access (WiMax) network and our decision to shut down our cable TV business in Montréal in 2012.
(D)

At the beginning of Q3 2012, our high-speed Internet and TV subscriber base were reduced by 8,844 customers and 7,514 customers respectively, to adjust for customer deactivations.
(E)

Our TV customer base was increased by 15,260 customers to include the cable operations of Northwestel Inc. at the beginning of 2011.
(F)

At the beginning of 2012, our TV subscriber base was reduced by 9,527 customers following our decision to shut down our cable TV business in Montréal in 2012.

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 6

Bell Wireline - Historical Trend

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 YTD
2012		    

Q3 12

  

  Q2 12

  

  Q1 12

     Total
2011		    

  Q4 11

  

  Q3 11

  

  Q2 11

  

  Q1 11

  

Bell Wireline

                                          

Local & access

 1,997     654   665   678     2,852     687   710   726   729  

Long distance

 610     192   206   212     903     219   223   227   234  

Data (A)

 4,199     1,386   1,395   1,418     5,642     1,450   1,384   1,393   1,415  

Equipment & other

 572     195   185   192     911     272   212   208   219  

Total external revenues

 7,378     2,427   2,451   2,500     10,308     2,628   2,529   2,554   2,597  

Inter-segment revenues

 234     78   77   79     313     81   81   76   75  

Total Bell Wireline operating revenues

 7,612     2,505   2,528   2,579     10,621     2,709   2,610   2,630   2,672  

Operating costs

 (4,623 )   (1,527 ) (1,520 ) (1,576 )   (6,466 )   (1,712 ) (1,567 ) (1,559 ) (1,628 )

EBITDA

 2,989     978   1,008   1,003     4,155     997   1,043   1,071   1,044  

EBITDA Margin

39.3

 %  

39.0

 %

39.9

 %

38.9

 %  

39.1

 %  

36.8

 %

40.0

 %

40.7

 %

39.1

 %
                                           

Capital expenditures

 1,632     514   586   532     1,973     647   474   450   402  

Capital Intensity

21.4

 %  

20.5

 %

23.2

 %

20.6

 %  

18.6

 %  

23.9

 %

18.2

 %

17.1

 %

15.0

 %

Local

                                          

Network access services (NAS)

                                          

Residential (B)

 3,027,343     3,027,343   3,111,883   3,205,002     3,276,121     3,276,121   3,365,854   3,461,121   3,544,600  

Business

 2,741,266     2,741,266   2,766,006   2,800,124     2,825,535     2,825,535   2,839,482   2,854,844   2,871,862  

Total

 5,768,609     5,768,609   5,877,889   6,005,126     6,101,656     6,101,656   6,205,336   6,315,965   6,416,462  

Network access service net (losses)/activations

                                          

Residential (B)

 (248,778 )   (84,540 ) (93,119 ) (71,119 )   (332,766 )   (89,733 ) (95,267 ) (83,479 ) (64,287 )

Business

 (84,269 )   (24,740 ) (34,118 ) (25,411 )   (41,283 )   (13,947 ) (15,362 ) (17,018 ) 5,044  

Total

 (333,047 )   (109,280 ) (127,237 ) (96,530 )   (374,049 )   (103,680 ) (110,629 ) (100,497 ) (59,243 )

Internet

                                          

High Speed Internet net activations (losses)

 25,145     13,416   (664 ) 12,393     15,426     1,091   (101 ) 1,275   13,161  

High Speed Internet subscribers EOP (C) (D)

 2,108,100     2,108,100   2,103,528   2,104,192     2,112,752     2,112,752   2,111,661   2,111,762   2,110,487  

TV

                                          

Net subscriber activations (E)

 50,227     15,846   16,758   17,623     68,221     27,702   26,169   6,292   8,058  

Total subscribers EOP (D) (E) (F)

 2,136,765     2,136,765   2,128,433   2,111,675     2,103,579     2,103,579   2,075,877   2,049,708   2,043,416  

 

(A)

Starting in Q1 2012, we have included TV service revenues in data revenues to align with the reporting practices of our peers. As a result, we have restated prior period results within Bell Wireline. Our previously reported Wireline segment and consolidated results did not change as a result of this restatement.
(B)

Residential NAS losses in Q2 2012 were increased by 7,692 lines following a review of customer account records.
(C)

At the beginning of 2012, high-speed Internet subscriber base was reduced by 20,953 customers to reflect the decommissioning of our worldwide interoperability for microwave access (WiMax) network and our decision to shut down our cable TV business in Montréal in 2012.
(D)

At the beginning of Q3 2012, our high-speed Internet and TV subscriber base were reduced by 8,844 customers and 7,514 customers respectively, to adjust for customer deactivations.
(E) Our TV customer base was increased by 15,260 customers to include the cable operations of Northwestel Inc. at the beginning of 2011.
(F) At the beginning of 2012, our TV subscriber base was reduced by 9,527 customers following our decision to shut down our cable TV business in Montréal in 2012.

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 7

 Bell Wireless (2)

 

Q3     Q3           YTD     YTD        

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 2012     2011     % change     2012     2011     % change  

Bell Wireless

                                  

Revenue

                                  

Service

 1,307     1,228     6.4 %   3,769     3,547     6.3 %

Product

 113     102     10.8 %   306     293     4.4 %

Total external Bell Wireless revenues

 1,420     1,330     6.8 %   4,075     3,840     6.1 %

Inter-segment

 14     9     55.6 %   40     26     53.8 %

Total Bell Wireless operating revenues

 1,434     1,339     7.1 %   4,115     3,866     6.4 %

Operating costs

 (880 )   (858 )   (2.6 %)   (2,484 )   (2,464 )   (0.8 %)

EBITDA

 554     481     15.2 %   1,631     1,402     16.3 %

EBITDA margin (Total revenues)

38.6

 %  

35.9

 %  

2.7

  pts  

39.6

 %  

36.3

 %  

3.3

  pts

EBITDA margin (Service revenues)

42.4

 %  

39.2

 %  

3.2

  pts  

43.3

 %  

39.5

 %  

3.8

  pts

 

                                  

Capital expenditures

 152     150     (1.3 %)   460     431     (6.7 %)

Capital intensity

10.6

 %  

11.2

 %  

0.6

  pts  

11.2

 %  

11.1

 %  

(0.1

 ) pts

Wireless gross activations

 490,696     525,780     (6.7 %)   1,307,107     1,424,479     (8.2 %)

Postpaid

 372,574     372,346     0.1 %   993,481     1,013,648     (2.0 %)

Wireless net activations

 129,764     85,749     51.3 %   155,645     127,548     22.0 %

Postpaid (A)

 148,502     126,854     17.1 %   313,145     301,811     3.8 %

Wireless subscribers EOP

 7,576,027     7,369,596     2.8 %   7,576,027     7,369,596     2.8 %

Postpaid

 6,281,211     5,843,180     7.5 %   6,281,211     5,843,180     7.5 %

Average revenue per unit (ARPU)($/month) (6)

 57.30     55.01     4.2 %   55.51     53.23     4.3 %

Churn (%) (average per month) (7)

 1.6 %   2.0 %  

0.4

  pts   1.7 %   2.0 %  

0.3

  pts

Prepaid

 3.3 %   3.9 %  

0.6

  pts   3.7 %   3.8 %  

0.1

  pts

Postpaid

 1.2 %   1.5 %  

0.3

  pts   1.3 %   1.5 %  

0.2

  pts

Usage per subscriber (min/month)

 307     291     5.5 %   299     278     7.6 %

Cost of acquisition (COA) (8) ($/sub)

 397     392     (1.3 %)   392     387     (1.3 %)
                                   

 

(A)

At the beginning of Q3 2012, our wireless postpaid net activations were reduced by 7,100 customers to adjust for customer deactivations.

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 8

Bell Wireless - Historical Trend

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 YTD
2012		    

  Q3 12

   Q2 12    Q1 12      Total
2011		     Q4 11    Q3 11    Q2 11    Q1 11   

Bell Wireless

                                          

Revenue

                                          

Service

 3,769     1,307   1,248   1,214     4,769     1,222   1,228   1,174   1,145  

Product

 306     113   99   94     422     129   102   92   99  

Total external Bell Wireless revenues

 4,075     1,420   1,347   1,308     5,191     1,351   1,330   1,266   1,244  

Inter-segment

 40     14   14   12     40     14   9   10   7  

Total Bell Wireless operating revenues

 4,115     1,434   1,361   1,320     5,231     1,365   1,339   1,276   1,251  

Operating costs

 (2,484 )   (880 ) (805 ) (799 )   (3,408 )   (944 ) (858 ) (816 ) (790 )

EBITDA

 1,631     554   556   521     1,823     421   481   460   461  

EBITDA margin (Total revenues)

39.6

 %  

38.6

 %

40.9

 %

39.5

 %  

34.8

 %  

30.8

 %

35.9

 %

36.1

 %

36.9

 %

EBITDA margin (Service revenues)

43.3

 %  

42.4

 %

44.6

 %

42.9

 %  

38.2

 %  

34.5

 %

39.2

 %

39.2

 %

40.3

 %

 

                                          

Capital expenditures

 460     152   172   136     619     188   150   168   113  

Capital intensity

11.2

 %  

10.6

 %

12.6

 %

10.3

 %  

11.8

 %  

13.8

 %

11.2

 %

13.2

 %

9.0

 %

 

                                          

Wireless gross activations

 1,307,107     490,696   428,265   388,146     1,936,396     511,917   525,780   474,900   423,799  

Postpaid

 993,481     372,574   327,335   293,572     1,402,965     389,317   372,346   341,645   299,657  

Wireless net activations

 155,645     129,764   47,208   (21,327 )   185,434     57,886   85,749   36,507   5,292  

Postpaid (A)

 313,145     148,502   102,067   62,576     433,797     131,986   126,854   94,309   80,648  

Wireless subscribers EOP

 7,576,027     7,576,027   7,453,363   7,406,155     7,427,482     7,427,482   7,369,596   7,283,847   7,247,340  

Postpaid

 6,281,211     6,281,211   6,139,809   6,037,742     5,975,166     5,975,166   5,843,180   5,716,326   5,622,017  

Average revenue per unit (ARPU)($/month)

 55.51     57.30   55.37   53.84     53.55     54.50   55.01   52.99   51.68  

Churn (%)(average per month)

 1.7 %   1.6 % 1.7 % 1.8 %   2.0 %   2.1 % 2.0 % 2.0 % 1.9 %

Prepaid

 3.7 %   3.3 % 3.7 % 3.9 %   3.9 %   4.2 % 3.9 % 3.7 % 3.7 %

Postpaid

 1.3 %   1.2 % 1.3 % 1.4 %   1.5 %   1.5 % 1.5 % 1.5 % 1.4 %

Usage per subscriber (min/month)

 299     307   303   285     283     299   291   282   256  

Cost of acquisition (COA)($/sub)

 392     397   381   399     403     450   392   400   366  

 

(A)

At the beginning of Q3 2012, our wireless postpaid net activations were reduced by 7,100 customers to adjust for customer deactivations.

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 9

BCE Inc.
Net debt and other information

BCE Inc. - Net debt and preferreds            
             
At September 30, 2012     BCE Inc.      
($ millions of Canadian dollars, except where otherwise indicated) (unaudited)            
      Bell      
  Bell   Aliant   BCE Inc.  
Debt due within one year 1,192   371   1,563  
Long-term debt 11,367   2,654   14,021  
Preferred shares - BCE (A) 1,698   -   1,698  
Cash and cash equivalents (512 ) (36 ) (548 )
Net debt 13,745   2,989   16,734  

 

Bell - Net debt and preferreds                  

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

                  
  September 30     June 30   March 31   Dec. 31  
  2012     2012   2012   2011  
                   

Debt due within one year

 1,192     1,179   1,980   1,724  

Long-term debt

 11,367     11,440   10,030   10,070  

Preferred shares - BCE (A)

 1,698     1,698   1,698   1,558  

Cash and cash equivalents

 (512 )   (769 ) (369 ) (140 )
Net Debt 13,745     13,548   13,339   13,212  
                   

Net Debt / Adjusted EBITDA (B)

 2.0     2.0   2.0   2.0  

Adjusted EBITDA (B) / Net interest, excluding interest on employee benefit obligations and including 50% of preferred dividends

 9.0     9.1   9.0   9.1  

 

Bell Media Inc. - Proportionate Information                                    
($ millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD                                  
  2012     Q3 2012   Q2 2012   Q1 2012     Total 2011   Q4 2011   Q3 2011   Q2 2011  
                                     
Proportionate Net Debt 198     198   211   188     230   230   220   275  
Proportionate EBITDA 316     124   128   64     278   113   62   103  

 

Cash Flow Information

                                      

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 Q3     Q3             YTD     YTD          

 

2012     2011   $ change   % change     2012     2011   $ change   % change  

Free Cash Flow (FCF)

                                      

Cash from operating activities, excluding acquisition costs paid

 1,370     1,651   (281 ) (17.0 %)   3,968     3,453   515   14.9 %

Capital expenditures

 (688 )   (652 ) (36 ) (5.5 %)   (2,144 )   (1,812 ) (332 ) (18.3 %)

Dividends paid on preferred shares

 (27 )   (31 ) 4   12.9 %   (94 )   (87 ) (7 ) (8.0 %)

Dividends/distributions paid by subsidiaries to non-controlling interest

 (19 )   (11 ) (8 ) (72.7 %)   (58 )   (23 ) (35 ) n.m.  

Bell Aliant distributions to BCE

 48     48   -   0.0 %   143     166   (23 ) (13.9 %)

FCF

 684     1,005   (321 ) (31.9 %)   1,815     1,697   118   7.0 %
                                       
                                       

 

Cash Flow Information - Historical Trend

                                          

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 YTD     Q3   Q2   Q1     Total     Q4   Q3   Q2   Q1  

 

2012     2012   2012   2012     2011     2011   2011   2011   2011  

Free Cash Flow (FCF)

                                          

Cash from operating activities, excluding acquisition costs paid

 3,968     1,370   1,593   1,005     4,129     676   1,651   1,065   737  

Capital expenditures

 (2,144 )   (688 ) (776 ) (680 )   (2,683 )   (871 ) (652 ) (645 ) (515 )

Dividends paid on preferred shares

 (94 )   (27 ) (34 ) (33 )   (118 )   (31 ) (31 ) (28 ) (28 )

Dividends/distributions paid by subsidiaries to non-controlling interest

 (58 )   (19 ) (26 ) (13 )   (31 )   (8 ) (11 ) (12 ) -  

Bell Aliant distributions to BCE

 143     48   47   48     214     48   48   47   71  

FCF

 1,815     684   804   327     1,511     (186 ) 1,005   427   265  
                                           

 

(A) Net debt includes 50% of preferred shares.
(B) Adjusted EBITDA is defined as EBITDA including dividends / distributions from Bell Aliant to BCE and is based on trailing 12 months data.

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 10

BCE Inc.
Consolidated Statements of Financial Position Data

 

September 30     June 30     March 31     December 31  

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 2012     2012     2012     2011  

ASSETS

                      

Current assets

                      

Cash

 130     82     130     130  

Cash equivalents

 418     706     267     45  

Trade and other receivables

 2,800     2,699     2,821     3,119  

Current tax receivable

 72     68     38     43  

Inventory

 407     366     361     427  

Prepaid expenses

 361     409     397     262  

Other current assets

 120     137     128     152  

Total current assets

 4,308     4,467     4,142     4,178  

Non-current assets

                      

Property, plant and equipment

 19,916     19,792     18,897     18,785  

Intangible assets

 7,751     7,859     7,983     8,013  

Deferred tax assets

 284     309     314     329  

Investments in associates and joint ventures

 780     322     314     307  

Other non-current assets

 529     491     576     629  

Goodwill

 7,185     7,185     7,185     7,185  

Total non-current assets

 36,445     35,958     35,269     35,248  

Total assets

 40,753     40,425     39,411     39,426  

LIABILITIES

                      

Current liabilities

                      

Trade payables and other liabilities

 3,659     3,637     3,464     4,056  

Interest payable

 149     156     154     134  

Dividends payable

 459     433     432     415  

Current tax liabilities

 243     147     43     47  

Debt due within one year

 1,563     1,526     2,386     2,106  

Total current liabilities

 6,073     5,899     6,479     6,758  

Non-current liabilities

                      

Long-term debt

 14,021     14,095     12,682     12,721  

Deferred tax liabilities

 630     710     832     881  

Employee benefit obligation

 4,311     3,788     3,180     2,966  

Other non-current liabilities

 1,182     1,110     1,297     1,341  

Total non-current liabilities

 20,144     19,703     17,991     17,909  

Total liabilities

 26,217     25,602     24,470     24,667  

 

                      

EQUITY

                      

Equity attributable to BCE shareholders

                      

Preferred shares

 3,395     3,395     3,395     3,115  

Common shares

 13,578     13,549     13,540     13,566  

Shares subject to cancellation

 -     -     -     (50 )

Contributed surplus

 2,555     2,547     2,536     2,527  

Accumulated other comprehensive (loss) income

 (15 )   8     (6 )   5  

Deficit

 (5,839 )   (5,573 )   (5,472 )   (5,385 )

Equity attributable to BCE shareholders

 13,674     13,926     13,993     13,778  

Non-controlling interest

 862     897     948     981  

Total equity

 14,536     14,823     14,941     14,759  

Total liabilities and equity

 40,753     40,425     39,411     39,426  

 

                      

Number of common shares outstanding

 774.6     773.9     773.6     775.4  

 

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 11

BCE Inc.
Consolidated Cash Flow Data

 

Q3     Q3             YTD     YTD        

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

 2012     2011     $ change       2012     2011     $ change  

Net earnings

 689     736     (47 )     2,244     2,001     243  

Adjustments to reconcile net earnings to cash flows from operating activities

                                    

Severance, acquisition and other costs

 24     130     (106 )     63     410     (347 )

Depreciation and amortization

 854     808     46       2,521     2,419     102  

Net employee benefit plans cost

 13     50     (37 )     91     146     (55 )

Net interest expense

 220     207     13       628     608     20  

Gains on investments

 -     -     -       (8 )   (89 )   81  

Income taxes

 248     80     168       628     473     155  

Contributions to employee pension plans

 (81 )   (91 )   10       (256 )   (530 )   274  

Payments under other employee future benefit plans

 (25 )   (25 )   -       (74 )   (76 )   2  

Severance and other costs paid

 (36 )   (37 )   1       (170 )   (343 )   173  

Acquisition costs paid

 (39 )   (7 )   (32 )     (96 )   (42 )   (54 )

Interest paid

 (222 )   (178 )   (44 )     (599 )   (561 )   (38 )

Income taxes paid (net of refunds)

 (39 )   (24 )   (15 )     (189 )   (57 )   (132 )

Operating assets and liabilities

 (17 )   267     (284 )     (94 )   (328 )   234  

Cash flows from operating activities

 1,589     1,916     (327 )     4,689     4,031     658  

Bell Aliant dividends/distributions paid to BCE

 48     48     -       143     166     (23 )

Capital expenditures

 (832 )   (814 )   (18 )     (2,601 )   (2,248 )   (353 )

Cash dividends paid on preferred shares

 (27 )   (31 )   4       (94 )   (87 )   (7 )

Cash dividends/distributions paid by subsidiaries to non-controlling interest

 (85 )   (75 )   (10 )     (255 )   (243 )   (12 )

Acquisition costs paid

 39     7     32       96     42     54  

Bell Aliant Free Cash Flow

 (48 )   (46 )   (2 )     (163 )   36     (199 )

Free Cash Flow (3)

 684     1,005     (321 )     1,815     1,697     118  

Bell Aliant free cash flow, excluding dividends/distributions paid

 -     (2 )   2       20     (202 )   222  

Business acquisitions

 (3 )   -     (3 )     (5 )   (680 )   675  

Acquisition costs paid

 (39 )   (7 )   (32 )     (96 )   (42 )   (54 )

Business dispositions

 -     -     -       -     2     (2 )

Increase in investments

 (399 )   (2 )   (397 )     (401 )   (6 )   (395 )

Decrease in investments

 5     2     3       16     50     (34 )

Other investing activities

 1     1     -       6     4     2  

Increase (decrease) in notes payable and bank advances

 15     106     (91 )     (106 )   (24 )   (82 )

Increase (reduction) in securitized trade receivables

 10     -     10       (15 )   (350 )   335  

Issue of long-term debt

 11     3     8       1,033     2,306     (1,273 )

Repayment of long-term debt

 (116 )   (193 )   77       (834 )   (2,008 )   1,174  

Cash dividends paid on common shares

 (420 )   (402 )   (18 )     (1,243 )   (1,117 )   (126 )

Issue of common shares

 4     15     (11 )     30     115     (85 )

Repurchase of common shares

 -     -     -       (107 )   -     (107 )

Issue of preferred shares

 -     345     (345 )     280     345     (65 )

Issue of equity securities by subsidiaries to non-controlling interest

 9     -     9       11     288     (277 )

Other financing activities

 (2 )   (43 )   41       (31 )   (45 )   14  

 

(924 )   (177 )   (747 )     (1,442 )   (1,364 )   (78 )

Net (decrease) increase in cash and cash equivalents

 (240 )   828     (1,068 )     373     333     40  

Cash and cash equivalents at beginning of period

 788     276     512       175     771     (596 )

Cash and cash equivalents at end of period

 548     1,104     (556 )     548     1,104     (556 )
                                     

Other information

                                    

Cash flow per share (9)

 $           0.98   $ 1.43   $ (0.45 )   $ 2.70   $ 2.32   $ 0.38  

Annualized cash flow yield (10)

 4.9 %   3.8 %   (1.1 ) pts     4.9 %   3.8 %   (1.1 ) pts
                                     

 

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 12

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

   YTD
2012		       Q3 12       Q2 12       Q1 12       Total
2011		       Q4 11   Q3 11       Q2 11       Q1 11  

Net earnings

   2,244       689       879       676       2,574       573   736       683       582  

Adjustments to reconcile net earnings to cash flows from operating activities

                                                                  

Severance, acquisition and other costs

   63       24       20       19       409       (1 ) 130       219       61  

Depreciation and amortization

   2,521       854       842       825       3,261       842   808       821       790  

Net employee benefit plans cost

   91       13       36       42       193       47   50       49       47  

Net interest expense

   628       220       205       203       821       213   207       212       189  

Gains on investments

   (8 )     -       -       (8 )     (89 )     -   -       (89 )     -  

Income taxes

   628       248       173       207       720       247   80       194       199  

Contributions to employee pension plans

   (256 )     (81 )     (89 )     (86 )     (1,491 )     (961 ) (91 )     (85 )     (354 )

Payments under other employee future benefit plans

   (74 )     (25 )     (25 )     (24 )     (102 )     (26 ) (25 )     (27 )     (24 )

Severance and other costs paid

   (170 )     (36 )     (42 )     (92 )     (411 )     (68 ) (37 )     (59 )     (247 )

Acquisition costs paid

   (96 )     (39 )     (32 )     (25 )     (70 )     (28 ) (7 )     (31 )     (4 )

Interest paid

   (599 )     (222 )     (197 )     (180 )     (795 )     (234 ) (178 )     (216 )     (167 )

Income taxes paid (net of refunds)

   (189 )     (39 )     (46 )     (104 )     (130 )     (73 ) (24 )     (25 )     (8 )

Operating assets and liabilities

   (94 )     (17 )     178       (255 )     (21 )     307   267       (265 )     (330 )

Cash flows from operating activities

   4,689       1,589       1,902       1,198       4,869       838   1,916       1,381       734  

Bell Aliant dividends/distributions paid to BCE

   143       48       47       48       214       48   48       47       71  

Capital expenditures

   (2,601 )     (832 )     (952 )     (817 )     (3,256 )     (1,008 ) (814 )     (800 )     (634 )

Cash dividends paid on preferred shares

   (94 )     (27 )     (34 )     (33 )     (118 )     (31 ) (31 )     (28 )     (28 )

Cash dividends/distributions paid by subsidiaries to non-controlling interest

   (255 )     (85 )     (91 )     (79 )     (315 )     (72 ) (75 )     (77 )     (91 )

Acquisition costs paid

   96       39       32       25       70       28   7       31       4  

Bell Aliant Free Cash Flow

   (163 )     (48 )     (100 )     (15 )     47       11   (46 )     (127 )     209  

Free Cash Flow

   1,815       684       804       327       1,511       (186 ) 1,005       427       265  

Bell Aliant free cash flow, excluding dividends/distributions paid

   20       -       53       (33 )     (261 )     (59 ) (2 )     80       (280 )

Business acquisitions

   (5 )     (3 )     -       (2 )     (680 )     -   -       (680 )     -  

Acquisition costs paid

   (96 )     (39 )     (32 )     (25 )     (70 )     (28 ) (7 )     (31 )     (4 )

Business dispositions

   -       -       -       -       2       -   -       -       2  

Increase in investments

   (401 )     (399 )     (1 )     (1 )     (12 )     (6 ) (2 )     (2 )     (2 )

Decrease in investments

   16       5       1       10       56       6   2       45       3  

Other investing activities

   6       1       4       1       6       2   1       (1 )     4  

(Decrease) increase in notes payable and bank advances

   (106 )     15       (387 )     266       30       54   106       (656 )     526  

(Reduction) increase in securitized trade receivables

   (15 )     10       (13 )     (12 )     (318 )     32   -       (348 )     (2 )

Issue of long-term debt

   1,033       11       1,011       11       2,314       8   3       1,301       1,002  

Repayment of long-term debt

   (834 )     (116 )     (633 )     (85 )     (2,350 )     (342 ) (193 )     (1,739 )     (76 )

Cash dividends paid on common shares

   (1,243 )     (420 )     (420 )     (403 )     (1,520 )     (403 ) (402 )     (371 )     (344 )

Issue of common shares

   30       4       8       18       152       37   15       51       49  

Repurchase of common shares

   (107 )     -       -       (107 )     (143 )     (143 ) -       -       -  

Issue of preferred shares

   280       -       -       280       345       -   345       -       -  

Issue of equity securities by subsidiaries to non-controlling interest

   11       9       1       1       403       115   -       -       288  

Other financing activities

   (31 )     (2 )     (5 )     (24 )     (61 )     (16 ) (43 )     28       (30 )

 

  (1,442 )     (924 )     (413 )     (105 )     (2,107 )     (743 ) (177 )     (2,323 )     1,136  

Net increase (decrease) in cash and cash equivalents

   373       (240 )     391       222       (596 )     (929 ) 828       (1,896 )     1,401  

Cash and cash equivalents at beginning of period

   175       788       397       175       771       1,104   276       2,172       771  

Cash and cash equivalents at end of period

   548       548       788       397       175       175   1,104       276       2,172  
                                                                   

Other information

                                                                  

Cash flow per share

 $ 2.70     $ 0.98    

$

 1.23    

$

 0.49  

 

 $       2.09     $            (0.23 ) $ 1.43    

$

 0.76  

 

$

 0.13  

Annualized cash flow yield

   4.9 %     4.9 %     6.0 %     5.1 %     4.6 %     4.6 % 3.8 %     3.3 %     4.3 %

 

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 13

Accompanying Notes

(1) Throughout this report, BCE means BCE Inc., its subsidiaries, joint ventures and associates; Bell means our Bell Wireline, Bell Wireless and Bell Media segments on an aggregate basis; and Bell Aliant means Bell Aliant Inc. and its subsidiaries.
 
(2) We report our results of operations in four segments: Bell Wireline, Bell Wireless, Bell Media and Bell Aliant. Our reporting structure reflects how we manage our business and how we classify our operations for planning and measuring performance.

Starting in the first quarter of 2012, we have included TV service revenues in data revenues to align with the reporting practices of our peers. As a result, we have restated prior period results within Bell Wireline. The previously reported Wireline segment and consolidated results did not change as a result of this restatement.

In the second quarter of 2011, BCE acquired the remaining 85% of CTV Inc. (CTV) common shares that it did not already own. CTV is a media company that holds specialty television, digital media, conventional TV and radio broadcasting assets. CTV is reported as a new segment, Bell Media. As at the acquisition date, we transferred certain assets from our wireline business segment to this new segment.
 
(3)

Non-GAAP Financial Measures

EBITDA

The term EBITDA does not have any standardized meaning according to IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other companies.

We define EBITDA as operating revenues less operating costs (including employee benefit plans service costs). We use EBITDA to evaluate the performance of our businesses as it reflects their ongoing profitability. 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. EBITDA also is one component in the determination of short-term incentive compensation for all management employees. EBITDA has no directly comparable IFRS financial measure. Alternatively, it may be reconciled to net earnings as shown in this document.

Adjusted net earnings and Adjusted earnings per share (EPS)

The terms Adjusted net earnings and Adjusted EPS do not have any standardized meaning according to IFRS. Therefore, they are unlikely to be comparable to similar measures presented by other companies.

We define Adjusted net earnings as net earnings attributable to common shareholders before severance, acquisition and other costs, and net (gains) losses on investments. We define Adjusted EPS as Adjusted net earnings per BCE common share.

We use Adjusted net earnings and Adjusted EPS, among other measures, to assess the performance of our businesses without the effects of severance, acquisition and other costs, and net (gains) losses on investments, net of tax and non-controlling interest. 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 IFRS financial measures are net earnings attributable to common shareholders and EPS.

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 14

Accompanying Notes

 

Free Cash Flow

The term free cash flow does not have any standardized meaning according to IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other companies.

We define free cash flow as cash flows from operating activities, excluding acquisition costs paid, and dividends/distributions received from Bell Aliant less capital expenditures, preferred share dividends, dividends/distributions paid by subsidiaries to non-controlling interest 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 reinvest in our company. We present free cash flow consistently from period to period, which allows us to compare our financial performance on a consistent basis.

We believe that certain investors and analysts use free cash flow to value a business and its underlying assets.

The most comparable IFRS 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:

Trailing 12 month free cash flow
Number of common shares outstanding at end of period multiplied by share price at end of period
 

BCE Inc. Supplementary Financial Information – Third Quarter 2012 Page 15