EX-99.2 3 supp_q414.htm SUPPLEMENTARY FINANCIAL INFORMATION - FOURTH QUARTER 2014 BCE Inc. Supplementary Financial Information – Fourth Quarter 2014

Exhibit 99.2

 

BCE (1)
Consolidated Operational Data (2)

(In millions of Canadian dollars, except share amounts) (unaudited)

   Q4
2014		     Q4
2013		       $ change  

% change

       TOTAL
2014		     TOTAL
2013		       $ change  

% change

  

Operating revenues

   5,528     5,382       146   2.7 %     21,042     20,400       642   3.1 %

Operating costs (A)

   (3,438 )   (3,312 )     (126 ) (3.8 %)     (12,463 )   (12,019 )     (444 ) (3.7 %)

Post-employment benefit plans service cost

   (68 )   (72 )     4   5.6 %     (276 )   (292 )     16   5.5 %

Adjusted EBITDA (3)

   2,022     1,998       24   1.2 %     8,303     8,089       214   2.6 %

Adjusted EBITDA margin (3)

   36.6 %   37.1 %         (0.5 ) pts     39.5 %   39.7 %         (0.2 ) pts

Severance, acquisition and other costs

   (58 )   (48 )     (10 ) (20.8 %)     (216 )   (406 )     190   46.8 %

Depreciation

   (734 )   (695 )     (39 ) (5.6 %)     (2,880 )   (2,734 )     (146 ) (5.3 %)

Amortization

   (118 )   (160 )     42   26.3 %     (572 )   (646 )     74   11.5 %

Finance costs

                                                  

Interest expense

   (238 )   (240 )     2   0.8 %     (929 )   (931 )     2   0.2 %

Interest on post-employment benefit obligations

   (25 )   (37 )     12   32.4 %     (101 )   (150 )     49   32.7 %

Other (expense) income

   (34 )   1       (35 ) n.m.       42     (6 )     48   n.m.  

Income taxes

   (221 )   (226 )     5   2.2 %     (929 )   (828 )     (101 ) (12.2 %)

Net earnings

   594     593       1   0.2 %     2,718     2,388       330   13.8 %

Net earnings attributable to:

                                                  

Common shareholders

   542     495       47   9.5 %     2,363     1,975       388   19.6 %

Preferred shareholders

   40     33       7   21.2 %     137     131       6   4.6 %

Non-controlling interest

   12     65       (53 ) (81.5 %)     218     282       (64 ) (22.7 %)

Net earnings

   594     593       1   0.2 %     2,718     2,388       330   13.8 %

Net earnings per common share - basic

 $ 0.64   $ 0.64     $ -   0.0 %   $ 2.98   $ 2.55     $ 0.43   16.9 %

Net earnings per common share - diluted

 $ 0.63   $ 0.63     $ -   0.0 %   $ 2.97   $ 2.54     $ 0.43   16.9 %

Dividends per common share

 $ 0.6175   $ 0.5825     $ 0.035   6.0 %   $ 2.4700   $ 2.3300     $ 0.140   6.0 %

Average number of common shares outstanding - basic (millions)

   837.7     775.9                   793.7     775.8              

Average number of common shares outstanding - diluted (millions)

   838.9     776.6                   794.6     776.4              

Number of common shares outstanding (millions)

   840.3     775.9                   840.3     775.9              

Adjusted Net Earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   542     495       47   9.5 %     2,363     1,975       388   19.6 %

Severance, acquisition and other costs

   42     33       9   27.3 %     148     299       (151 ) (50.5 %)

Net losses (gains) on investments

   8     12       (4 ) 33.3 %     (8 )   7       (15 ) n.m.  

Early debt redemption costs

   18     -       18   n.m.       21     36       (15 ) (41.7 %)

Adjusted net earnings (3)

   610     540       70   13.0 %     2,524     2,317       207   8.9 %

Impact on net earnings per share

 $ 0.08   $ 0.06     $ 0.02   33.3 %   $ 0.20   $ 0.44     $ (0.24 ) (54.5 %)

Adjusted EPS (3)

$

0.72

 

$

0.70

 

 

$

0.02

 

2.9

%

 

$

3.18

 

$

2.99

 

 

$

0.19

 

6.4

%

 

(A) Excludes post-employment benefit plans service cost
n.m. : not meaningful

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 2

BCE
Consolidated Operational Data - Historical Trend

(In millions of Canadian dollars, except share amounts) (unaudited)

   TOTAL
2014		       Q4 14     Q3 14     Q2 14     Q1 14       TOTAL
2013		       Q4 13     Q3 13     Q2 13     Q1 13  

Operating revenues

   21,042       5,528     5,195     5,220     5,099       20,400       5,382     5,099     5,000     4,919  

Operating costs (A)

   (12,463 )     (3,438 )   (3,014 )   (3,008 )   (3,003 )     (12,019 )     (3,312 )   (2,962 )   (2,865 )   (2,880 )

Post-employment benefit plans service cost

   (276 )     (68 )   (66 )   (68 )   (74 )     (292 )     (72 )   (74 )   (69 )   (77 )

Adjusted EBITDA

   8,303       2,022     2,115     2,144     2,022       8,089       1,998     2,063     2,066     1,962  

Adjusted EBITDA margin

   39.5 %     36.6 %   40.7 %   41.1 %   39.7 %     39.7 %     37.1 %   40.5 %   41.3 %   39.9 %

Severance, acquisition and other costs

   (216 )     (58 )   (66 )   (54 )   (38 )     (406 )     (48 )   (297 )   (28 )   (33 )

Depreciation

   (2,880 )     (734 )   (739 )   (708 )   (699 )     (2,734 )     (695 )   (683 )   (681 )   (675 )

Amortization

   (572 )     (118 )   (116 )   (171 )   (167 )     (646 )     (160 )   (162 )   (161 )   (163 )

Finance costs

                                                                  

Interest expense

   (929 )     (238 )   (227 )   (229 )   (235 )     (931 )     (240 )   (242 )   (228 )   (221 )

Interest on post-employment benefit obligations

   (101 )     (25 )   (25 )   (26 )   (25 )     (150 )     (37 )   (38 )   (38 )   (37 )

Other income (expense)

   42       (34 )   2     (13 )   87       (6 )     1     (24 )   (63 )   80  

Income taxes

   (929 )     (221 )   (241 )   (236 )   (231 )     (828 )     (226 )   (165 )   (196 )   (241 )

Net earnings

   2,718       594     703     707     714       2,388       593     452     671     672  

Net earnings attributable to:

                                                                  

Common shareholders

   2,363       542     600     606     615       1,975       495     343     571     566  

Preferred shareholders

   137       40     31     33     33       131       33     32     33     33  

Non-controlling interest

   218       12     72     68     66       282       65     77     67     73  

Net earnings

   2,718       594     703     707     714       2,388       593     452     671     672  

Net earnings per common share - basic

 $ 2.98     $ 0.64   $ 0.77   $ 0.78   $ 0.79     $ 2.55     $ 0.64   $ 0.44   $ 0.74   $ 0.73  

Net earnings per common share - diluted

 $ 2.97     $ 0.63   $ 0.77   $ 0.78   $ 0.79     $ 2.54     $ 0.63   $ 0.44   $ 0.74   $ 0.73  

Dividends per common share

 $ 2.4700     $ 0.6175   $ 0.6175   $ 0.6175   $ 0.6175     $ 2.3300     $ 0.5825   $ 0.5825   $ 0.5825   $ 0.5825  

Average number of common shares outstanding - basic (millions)

   793.7       837.7     782.1     777.7     776.5       775.8       775.9     775.9     775.9     775.7  

Average number of common shares outstanding - diluted (millions)

   794.6       838.9     783.0     778.6     777.2       776.4       776.6     776.3     776.6     776.3  

Number of common shares outstanding (millions)

   840.3       840.3     828.3     778.1     777.3       775.9       775.9     775.9     775.9     775.9  

Adjusted Net Earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   2,363       542     600     606     615       1,975       495     343     571     566  

Severance, acquisition and other costs

   148       42     45     38     23       299       33     222     21     23  

Net (gains) losses on investments

   (8 )     8     -     (4 )   (12 )     7       12     (2 )   (1 )   (2 )

Early debt redemption costs

   21       18     3     -     -       36       -     21     3     12  

Adjusted net earnings

 

2,524

 

 

 

610

 

 

648

 

 

640

 

 

626

 

 

 

2,317

 

 

 

540

 

 

584

 

 

594

 

 

599

 

Impact on net earnings per share

 $ 0.20     $ 0.08   $ 0.06   $ 0.04   $ 0.02     $ 0.44     $ 0.06   $ 0.31   $ 0.03   $ 0.04  

Adjusted EPS

$

3.18

 

 

$

0.72

 

$

0.83

 

$

0.82

 

$

0.81

 

 

$

2.99

 

 

$

0.70

 

$

0.75

 

$

0.77

 

$

0.77

 

 

(A) Excludes post-employment benefit plans service cost

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 3

BCE (1)
Segmented Data (2)

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

 Q4
2014		   Q4
2013		     $ change  

% change

     TOTAL
2014		   TOTAL
2013		     $ change  

% change

  
                                       

Revenues

                                      

Bell Wireless

 1,649   1,505     144   9.6 %   6,241   5,849     392   6.7 %

Bell Wireline

 2,628   2,601     27   1.0 %   10,040   10,097     (57 ) (0.6 %)

Bell Media

 789   821     (32 ) (3.9 %)   2,937   2,557     380   14.9 %

Inter-segment eliminations

 (126 ) (114 )   (12 ) (10.5 %)   (484 ) (394 )   (90 ) (22.8 %)

Total Bell

 4,940   4,813     127   2.6 %   18,734   18,109     625   3.5 %

Bell Aliant

 700   688     12   1.7 %   2,757   2,759     (2 ) (0.1 %)

Inter-segment eliminations

 (112 ) (119 )   7   5.9 %   (449 ) (468 )   19   4.1 %

Total BCE

 5,528   5,382     146   2.7 %   21,042   20,400     642   3.1 %
                                       

Operating costs

                                      

Bell Wireless

 (1,064 ) (976 )   (88 ) (9.0 %)   (3,677 ) (3,509 )   (168 ) (4.8 %)

Bell Wireline

 (1,675 ) (1,667 )   (8 ) (0.5 %)   (6,272 ) (6,303 )   31   0.5 %

Bell Media

 (597 ) (591 )   (6 ) (1.0 %)   (2,203 ) (1,874 )   (329 ) (17.6 %)

Inter-segment eliminations

 126   114     12   10.5 %   484   394     90   22.8 %

Total Bell

 (3,210 ) (3,120 )   (90 ) (2.9 %)   (11,668 ) (11,292 )   (376 ) (3.3 %)

Bell Aliant

 (408 ) (383 )   (25 ) (6.5 %)   (1,520 ) (1,487 )   (33 ) (2.2 %)

Inter-segment eliminations

 112   119     (7 ) (5.9 %)   449   468     (19 ) (4.1 %)

Total BCE

 (3,506 ) (3,384 )   (122 ) (3.6 %)   (12,739 ) (12,311 )   (428 ) (3.5 %)
                                       

Adjusted EBITDA

                                      

Bell Wireless

 585   529     56   10.6 %   2,564   2,340     224   9.6 %

Margin

 35.5 % 35.1 %       0.4  pts   41.1 % 40.0 %       1.1  pts

Bell Wireline

 953   934     19   2.0 %   3,768   3,794     (26 ) (0.7 %)

Margin

 36.3 % 35.9 %       0.4  pts   37.5 % 37.6 %       (0.1 ) pts

Bell Media

 192   230     (38 ) (16.5 %)   734   683     51   7.5 %

Margin

 24.3 % 28.0 %       (3.7 ) pts   25.0 % 26.7 %       (1.7 ) pts

Total Bell

 1,730   1,693     37   2.2 %   7,066   6,817     249   3.7 %

Margin

 35.0 % 35.2 %       (0.2 ) pts   37.7 % 37.6 %       0.1  pts

Bell Aliant

 292   305     (13 ) (4.3 %)   1,237   1,272     (35 ) (2.8 %)

Margin

 41.7 % 44.3 %       (2.6 ) pts   44.9 % 46.1 %       (1.2 ) pts

Total BCE

 2,022   1,998     24   1.2 %   8,303   8,089     214   2.6 %

Margin

 36.6 % 37.1 %       (0.5 ) pts   39.5 % 39.7 %       (0.2 ) pts
                                       

Capital expenditures

                                      

Bell Wireless

 211   226     15   6.6 %   671   639     (32 ) (5.0 %)

Capital Intensity (4)

 12.8 % 15.0 %       2.2  pts   10.8 % 10.9 %       0.1  pts

Bell Wireline

 667   702     35   5.0 %   2,334   2,247     (87 ) (3.9 %)

Capital Intensity

 25.4 % 27.0 %       1.6  pts   23.2 % 22.3 %       (0.9 ) pts

Bell Media

 54   64     10   15.6 %   137   115     (22 ) (19.1 %)

Capital Intensity

 6.8 % 7.8 %       1.0  pts   4.7 % 4.5 %       (0.2 ) pts

Total Bell

 932   992     60   6.0 %   3,142   3,001     (141 ) (4.7 %)

Capital Intensity

 18.9 % 20.6 %       1.7  pts   16.8 % 16.6 %       (0.2 ) pts

Bell Aliant

 144   147     3   2.0 %   575   570     (5 ) (0.9 %)

Capital Intensity

 20.6 % 21.4 %       0.8  pts   20.9 % 20.7 %       (0.2 ) pts

Total BCE

 1,076   1,139     63   5.5 %   3,717   3,571     (146 ) (4.1 %)

Capital Intensity

 19.5 % 21.2 %       1.7  pts   17.7 % 17.5 %       (0.2 ) pts

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 4

BCE
Segmented Data - Historical Trend

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

 TOTAL
2014		     Q4 14   Q3 14   Q2 14   Q1 14     TOTAL
2013		     Q4 13   Q3 13   Q2 13   Q1 13  
                                               

Revenues

                                              

Bell Wireless

 6,241     1,649   1,598   1,522   1,472     5,849     1,505   1,493   1,442   1,409  

Bell Wireline

 10,040     2,628   2,465   2,485   2,462     10,097     2,601   2,482   2,506   2,508  

Bell Media

 2,937     789   665   761   722     2,557     821   664   559   513  

Inter-segment eliminations

 (484 )   (126 ) (121 ) (119 ) (118 )   (394 )   (114 ) (115 ) (83 ) (82 )

Total Bell

 18,734     4,940   4,607   4,649   4,538     18,109     4,813   4,524   4,424   4,348  

Bell Aliant

 2,757     700   699   682   676     2,759     688   696   691   684  

Inter-segment eliminations

 (449 )   (112 ) (111 ) (111 ) (115 )   (468 )   (119 ) (121 ) (115 ) (113 )

Total BCE

 21,042     5,528   5,195   5,220   5,099     20,400     5,382   5,099   5,000   4,919  
                                               

Operating costs

                                              

Bell Wireless

 (3,677 )   (1,064 ) (914 ) (855 ) (844 )   (3,509 )   (976 ) (876 ) (833 ) (824 )

Bell Wireline

 (6,272 )   (1,675 ) (1,533 ) (1,532 ) (1,532 )   (6,303 )   (1,667 ) (1,559 ) (1,527 ) (1,550 )

Bell Media

 (2,203 )   (597 ) (483 ) (551 ) (572 )   (1,874 )   (591 ) (465 ) (403 ) (415 )

Inter-segment eliminations

 484     126   121   119   118     394     114   115   83   82  

Total Bell

 (11,668 )   (3,210 ) (2,809 ) (2,819 ) (2,830 )   (11,292 )   (3,120 ) (2,785 ) (2,680 ) (2,707 )

Bell Aliant

 (1,520 )   (408 ) (382 ) (368 ) (362 )   (1,487 )   (383 ) (372 ) (369 ) (363 )

Inter-segment eliminations

 449     112   111   111   115     468     119   121   115   113  

Total BCE

 (12,739 )   (3,506 ) (3,080 ) (3,076 ) (3,077 )   (12,311 )   (3,384 ) (3,036 ) (2,934 ) (2,957 )
                                               

Adjusted EBITDA

                                              

Bell Wireless

 2,564     585   684   667   628     2,340     529   617   609   585  

Margin

 41.1 %   35.5 % 42.8 % 43.8 % 42.7 %   40.0 %   35.1 % 41.3 % 42.2 % 41.5 %

Bell Wireline

 3,768     953   932   953   930     3,794     934   923   979   958  

Margin

 37.5 %   36.3 % 37.8 % 38.4 % 37.8 %   37.6 %   35.9 % 37.2 % 39.1 % 38.2 %

Bell Media

 734     192   182   210   150     683     230   199   156   98  

Margin

 25.0 %   24.3 % 27.4 % 27.6 % 20.8 %   26.7 %   28.0 % 30.0 % 27.9 % 19.1 %

Total Bell

 7,066     1,730   1,798   1,830   1,708     6,817     1,693   1,739   1,744   1,641  

Margin

 37.7 %   35.0 % 39.0 % 39.4 % 37.6 %   37.6 %   35.2 % 38.4 % 39.4 % 37.7 %

Bell Aliant

 1,237     292   317   314   314     1,272     305   324   322   321  

Margin

 44.9 %   41.7 % 45.4 % 46.0 % 46.4 %   46.1 %   44.3 % 46.6 % 46.6 % 46.9 %

Total BCE

 8,303     2,022   2,115   2,144   2,022     8,089     1,998   2,063   2,066   1,962  

Margin

 39.5 %   36.6 % 40.7 % 41.1 % 39.7 %   39.7 %   37.1 % 40.5 % 41.3 % 39.9 %
                                               

Capital expenditures

                                              

Bell Wireless

 671     211   179   164   117     639     226   157   134   122  

Capital Intensity

 10.8 %   12.8 % 11.2 % 10.8 % 7.9 %   10.9 %   15.0 % 10.5 % 9.3 % 8.7 %

Bell Wireline

 2,334     667   609   595   463     2,247     702   562   523   460  

Capital Intensity

 23.2 %   25.4 % 24.7 % 23.9 % 18.8 %   22.3 %   27.0 % 22.6 % 20.9 % 18.3 %

Bell Media

 137     54   37   32   14     115     64   23   16   12  

Capital Intensity

 4.7 %   6.8 % 5.6 % 4.2 % 1.9 %   4.5 %   7.8 % 3.5 % 2.9 % 2.3 %

Total Bell

 3,142     932   825   791   594     3,001     992   742   673   594  

Capital Intensity

 16.8 %   18.9 % 17.9 % 17.0 % 13.1 %   16.6 %   20.6 % 16.4 % 15.2 % 13.7 %

Bell Aliant

 575     144   150   146   135     570     147   138   157   128  

Capital Intensity

 20.9 %   20.6 % 21.5 % 21.4 % 20.0 %   20.7 %   21.4 % 19.8 % 22.7 % 18.7 %

Total BCE

 3,717     1,076   975   937   729     3,571     1,139   880   830   722  

Capital Intensity

 17.7 %   19.5 % 18.8 % 18.0 % 14.3 %   17.5 %   21.2 % 17.3 % 16.6 % 14.7 %

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 5

BCE (Bell and Bell Aliant) (1)
Customer Connections

 

Q4
2014		   Q4
2013		    

% change

     TOTAL
2014		   TOTAL
2013		    

% change

  

Total Connections

                              

Wireless subscribers (A)

 8,118,628   7,925,032     2.4 %   8,118,628   7,925,032     2.4 %

Postpaid (A)

 7,110,047   6,798,093     4.6 %   7,110,047   6,798,093     4.6 %

High-speed Internet subscribers

 3,297,026   3,136,636     5.1 %   3,297,026   3,136,636     5.1 %

TV (Satellite and Internet Protocol Television (IPTV) subscribers)

 2,642,608   2,489,248     6.2 %   2,642,608   2,489,248     6.2 %

IPTV

 933,547   657,513     42.0 %   933,547   657,513     42.0 %

Total Growth Services

 14,058,262   13,550,916     3.7 %   14,058,262   13,550,916     3.7 %

Network Access Service (NAS) lines

 7,130,852   7,595,569     (6.1 %)   7,130,852   7,595,569     (6.1 %)

Total Services

 21,189,114   21,146,485     0.2 %   21,189,114   21,146,485     0.2 %
                               

Net activations

                              

Wireless subscribers

 83,498   94,316     (11.5 %)   193,596   220,608     (12.2 %)

Postpaid

 118,120   120,699     (2.1 %)   311,954   381,740     (18.3 %)

High-speed Internet subscribers

 52,010   22,869     n.m.     160,390   91,401     75.5 %

TV (Satellite and IPTV subscribers)

 42,190   51,148     (17.5 %)   153,360   177,183     (13.4 %)

IPTV

 76,074   75,120     1.3 %   276,034   286,195     (3.6 %)

Total Growth Services

 177,698   168,333     5.6 %   507,346   489,192     3.7 %

NAS lines

 (93,005 ) (134,714 )   31.0 %   (464,717 ) (540,740 )   14.1 %

Total Services

 84,693   33,619     n.m.     42,629   (51,548 )   n.m.  

 

(A) In Q4 2013, following a review of our wireless subscriber metrics, our 2013 postpaid subscriber base was reduced by 99,098 customers to exclude all machine-to-machine subscribers.
Additionally, our postpaid subscriber base was reduced by 18,354 subscribers to adjust for customer deactivations and by 8,022 subscribers subsequent to a review of customer accounts.
Our prepaid subscriber base was increased by 5,008 customers subsequent to a review of subscriber metrics.
n.m. : not meaningful

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 6

BCE (Bell and Bell Aliant)
Customer Connections - Historical Trend

 

TOTAL
2014		     Q4 14   Q3 14   Q2 14   Q1 14     TOTAL
2013		     Q4 13   Q3 13   Q2 13   Q1 13  

Total Connections

                                              

Wireless subscribers (A)

 8,118,628     8,118,628   8,035,130   7,951,494   7,908,596     7,925,032     7,925,032   7,951,182   7,860,429   7,815,475  

Postpaid (A)

 7,110,047     7,110,047   6,991,927   6,900,148   6,832,197     6,798,093     6,798,093   6,802,868   6,699,101   6,600,971  

High-speed Internet subscribers

 3,297,026     3,297,026   3,245,016   3,180,762   3,163,218     3,136,636     3,136,636   3,113,767   3,066,571   3,057,884  

TV (Satellite and IPTV subscribers)

 2,642,608     2,642,608   2,600,418   2,562,840   2,529,471     2,489,248     2,489,248   2,438,100   2,377,021   2,340,201  

IPTV

 933,547     933,547   857,473   783,023   723,891     657,513     657,513   582,393   495,038   433,031  

Total Growth Services

 14,058,262     14,058,262   13,880,564   13,695,096   13,601,285     13,550,916     13,550,916   13,503,049   13,304,021   13,213,560  

NAS lines

 7,130,852     7,130,852   7,223,857   7,331,909   7,462,829     7,595,569     7,595,569   7,730,283   7,851,441   7,995,755  

Total Services

 21,189,114     21,189,114   21,104,421   21,027,005   21,064,114     21,146,485     21,146,485   21,233,332   21,155,462   21,209,315  
                                               

Net activations

                                              

Wireless subscribers

 193,596     83,498   83,636   42,898   (16,436 )   220,608     94,316   90,753   44,954   (9,415 )

Postpaid

 311,954     118,120   91,779   67,951   34,104     381,740     120,699   103,767   98,130   59,144  

High-speed Internet subscribers

 160,390     52,010   64,254   17,544   26,582     91,401     22,869   47,196   8,687   12,649  

TV (Satellite and IPTV subscribers)

 153,360     42,190   37,578   33,369   40,223     177,183     51,148   61,079   36,820   28,136  

IPTV

 276,034     76,074   74,450   59,132   66,378     286,195     75,120   87,355   62,007   61,713  

Total Growth Services

 507,346     177,698   185,468   93,811   50,369     489,192     168,333   199,028   90,461   31,370  

NAS lines

 (464,717 )   (93,005 ) (108,052 ) (130,920 ) (132,740 )   (540,740 )   (134,714 ) (121,158 ) (144,314 ) (140,554 )

Total Services

 42,629     84,693   77,416   (37,109 ) (82,371 )   (51,548 )   33,619   77,870   (53,853 ) (109,184 )

 

(A) In Q4 2013, following a review of our wireless subscriber metrics, our 2013 postpaid subscriber base was reduced by 99,098 customers to exclude all machine-to-machine subscribers.
Additionally, our postpaid subscriber base was reduced by 18,354 subscribers to adjust for customer deactivations and by 8,022 subscribers subsequent to a review of customer accounts.
Our prepaid subscriber base was increased by 5,008 customers subsequent to a review of subscriber metrics.

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 7

Bell Wireless (1)

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

 Q4
2014		   Q4
2013		    

% change

     TOTAL
2014		   TOTAL
2013		    

% change

  

Bell Wireless

                              

Revenues

                              

Service

 1,469   1,359     8.1 %   5,705   5,362     6.4 %

Product

 167   134     24.6 %   483   432     11.8 %

Total external Bell Wireless revenues

 1,636   1,493     9.6 %   6,188   5,794     6.8 %

Inter-segment

 13   12     8.3 %   53   55     (3.6 %)

Total Bell Wireless operating revenues

 1,649   1,505     9.6 %   6,241   5,849     6.7 %

Operating costs

 (1,064 ) (976 )   (9.0 %)   (3,677 ) (3,509 )   (4.8 %)

Adjusted EBITDA

 585   529     10.6 %   2,564   2,340     9.6 %

Adjusted EBITDA margin (Total revenues)

 35.5 % 35.1 %   0.4  pts   41.1 % 40.0 %   1.1  pts

Adjusted EBITDA margin (Service revenues)

 39.8 % 38.9 %   0.9  pts   44.9 % 43.6 %   1.3  pts
                               

Capital expenditures

 211   226     6.6 %   671   639     (5.0 %)

Capital intensity

 12.8 % 15.0 %   2.2  pts   10.8 % 10.9 %   0.1  pts

Wireless gross activations

 455,457   462,469     (1.5 %)   1,614,364   1,694,055     (4.7 %)

Postpaid

 377,735   368,154     2.6 %   1,271,599   1,332,423     (4.6 %)

Wireless net activations

 83,509   93,700     (10.9 %)   192,368   217,768     (11.7 %)

Postpaid

 117,378   119,520     (1.8 %)   308,504   378,121     (18.4 %)

Wireless subscribers end of period (EOP) (A)

 7,970,702   7,778,334     2.5 %   7,970,702   7,778,334     2.5 %

Postpaid (A)

 6,986,196   6,677,692     4.6 %   6,986,196   6,677,692     4.6 %

Average revenue per user (4) (ARPU)($/month)

 61.12   57.92     5.5 %   60.07   57.25     4.9 %

Churn (%) (4)(average per month)

 1.57 % 1.59 %   0.02  pts   1.52 % 1.60 %   0.08  pts

Prepaid

 3.42 % 3.41 %   (0.01 ) pts   3.43 % 3.55 %   0.12  pts

Postpaid

 1.30 % 1.29 %   (0.01 ) pts   1.22 % 1.25 %   0.03  pts

Cost of acquisition (COA) (4) ($/subscriber)

 497   468     (6.2 %)   443   421     (5.2 %)

 

(A) In Q4 2013, following a review of our wireless subscriber metrics, our 2013 postpaid subscriber base was reduced by 99,098 customers to exclude all machine-to-machine subscribers.
Additionally, our postpaid subscriber base was reduced by 18,354 subscribers to adjust for customer deactivations and by 8,022 subscribers subsequent to a review of customer accounts.
Our prepaid subscriber base was increased by 5,008 customers subsequent to a review of subscriber metrics.

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 8

Bell Wireless - Historical Trend

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

 TOTAL
2014		     Q4 14   Q3 14   Q2 14   Q1 14     TOTAL
2013		     Q4 13   Q3 13   Q2 13   Q1 13  

Bell Wireless

                                              

Revenues

                                              

Service

 5,705     1,469   1,468   1,404   1,364     5,362     1,359   1,372   1,328   1,303  

Product

 483     167   117   105   94     432     134   106   99   93  

Total external Bell Wireless revenues

 6,188     1,636   1,585   1,509   1,458     5,794     1,493   1,478   1,427   1,396  

Inter-segment

 53     13   13   13   14     55     12   15   15   13  

Total Bell Wireless operating revenues

 6,241     1,649   1,598   1,522   1,472     5,849     1,505   1,493   1,442   1,409  

Operating costs

 (3,677 )   (1,064 ) (914 ) (855 ) (844 )   (3,509 )   (976 ) (876 ) (833 ) (824 )

Adjusted EBITDA

 2,564     585   684   667   628     2,340     529   617   609   585  

Adjusted EBITDA margin (Total revenues)

 41.1 %   35.5 % 42.8 % 43.8 % 42.7 %   40.0 %   35.1 % 41.3 % 42.2 % 41.5 %

Adjusted EBITDA margin (Service revenues)

 44.9 %   39.8 % 46.6 % 47.5 % 46.0 %   43.6 %   38.9 % 45.0 % 45.9 % 44.9 %
                                               

Capital expenditures

 671     211   179   164   117     639     226   157   134   122  

Capital intensity

 10.8 %   12.8 % 11.2 % 10.8 % 7.9 %   10.9 %   15.0 % 10.5 % 9.3 % 8.7 %

Wireless gross activations

 1,614,364     455,457   423,833   383,345   351,729     1,694,055     462,469   438,722   421,647   371,217  

Postpaid

 1,271,599     377,735   326,708   291,993   275,163     1,332,423     368,154   333,081   336,052   295,136  

Wireless net activations

 192,368     83,509   83,106   41,431   (15,678 )   217,768     93,700   89,459   43,566   (8,957 )

Postpaid

 308,504     117,378   90,976   66,186   33,964     378,121     119,520   102,714   96,390   59,497  

Wireless subscribers EOP (A)

 7,970,702     7,970,702   7,887,193   7,804,087   7,762,656     7,778,334     7,778,334   7,805,100   7,715,641   7,672,075  

Postpaid (A)

 6,986,196     6,986,196   6,868,818   6,777,842   6,711,656     6,677,692     6,677,692   6,683,646   6,580,932   6,484,542  

ARPU ($/month)

 60.07     61.12   61.73   59.49   57.90     57.25     57.92   58.30   56.85   55.92  

Churn (%)(average per month)

 1.52 %   1.57 % 1.45 % 1.47 % 1.58 %   1.60 %   1.59 % 1.50 % 1.64 % 1.65 %

Prepaid

 3.43 %   3.42 % 3.12 % 3.48 % 3.67 %   3.55 %   3.41 % 3.27 % 3.71 % 3.79 %

Postpaid

 1.22 %   1.30 % 1.20 % 1.16 % 1.24 %   1.25 %   1.29 % 1.20 % 1.27 % 1.25 %

COA ($/subscriber)

 443     497   421   403   442     421     468   403   402   404  

 

(A) In Q4 2013, following a review of our wireless subscriber metrics, our 2013 postpaid subscriber base was reduced by 99,098 customers to exclude all machine-to-machine subscribers.
Additionally, our postpaid subscriber base was reduced by 18,354 subscribers to adjust for customer deactivations and by 8,022 subscribers subsequent to a review of customer accounts.
Our prepaid subscriber base was increased by 5,008 customers subsequent to a review of subscriber metrics.

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 9

Bell Wireline (1)

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

 Q4
2014		   Q4
2013		    

% change

     TOTAL
2014		   TOTAL
2013		    

% change

  

Bell Wireline

                              

Data

 1,573   1,513     4.0 %   5,991   5,828     2.8 %

Local & access

 578   606     (4.6 %)   2,364   2,497     (5.3 %)

Long distance

 173   171     1.2 %   668   722     (7.5 %)

Equipment & other

 213   222     (4.1 %)   664   707     (6.1 %)

Total external revenues

 2,537   2,512     1.0 %   9,687   9,754     (0.7 %)

Inter-segment revenues

 91   89     2.2 %   353   343     2.9 %

Total Bell Wireline operating revenues

 2,628   2,601     1.0 %   10,040   10,097     (0.6 %)

Operating costs

 (1,675 ) (1,667 )   (0.5 %)   (6,272 ) (6,303 )   0.5 %

Adjusted EBITDA

 953   934     2.0 %   3,768   3,794     (0.7 %)

Adjusted EBITDA Margin

 36.3 % 35.9 %   0.4  pts   37.5 % 37.6 %   (0.1 ) pts
                               

Capital expenditures

 667   702     5.0 %   2,334   2,247     (3.9 %)

Capital intensity

 25.4 % 27.0 %   1.6  pts   23.2 % 22.3 %   (0.9 ) pts

High-speed Internet

                              

High-speed Internet net activations

 34,126   15,690     n.m.     102,946   57,722     78.3 %

High-speed Internet subscribers EOP

 2,287,489   2,184,543     4.7 %   2,287,489   2,184,543     4.7 %

TV

                              

Net subscriber activations

 24,437   36,189     (32.5 %)   98,452   122,450     (19.6 %)

Fibe TV

 58,371   60,301     (3.2 %)   221,103   231,132     (4.3 %)

Total subscribers EOP

 2,376,885   2,278,433     4.3 %   2,376,885   2,278,433     4.3 %

Fibe TV

 700,533   479,430     46.1 %   700,533   479,430     46.1 %

Local

                              

NAS

                              

Residential

 2,435,471   2,652,429     (8.2 %)   2,435,471   2,652,429     (8.2 %)

Business

 2,457,765   2,589,820     (5.1 %)   2,457,765   2,589,820     (5.1 %)

Total

 4,893,236   5,242,249     (6.7 %)   4,893,236   5,242,249     (6.7 %)

NAS net (losses)/activations

                              

Residential

 (40,178 ) (63,281 )   36.5 %   (216,958 ) (287,885 )   24.6 %

Business

 (26,527 ) (32,478 )   18.3 %   (132,055 ) (114,805 )   (15.0 %)

Total

 (66,705 ) (95,759 )   30.3 %   (349,013 ) (402,690 )   13.3 %

n.m.: not meaningful

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 10

Bell Wireline - Historical Trend

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

 TOTAL
2014		     Q4 14   Q3 14   Q2 14   Q1 14     TOTAL
2013		     Q4 13   Q3 13   Q2 13   Q1 13  

Bell Wireline

                                              

Data

 5,991     1,573   1,470   1,485   1,463     5,828     1,513   1,426   1,456   1,433  

Local & access

 2,364     578   588   595   603     2,497     606   613   632   646  

Long distance

 668     173   163   170   162     722     171   184   183   184  

Equipment & other

 664     213   155   147   149     707     222   168   153   164  

Total external revenues

 9,687     2,537   2,376   2,397   2,377     9,754     2,512   2,391   2,424   2,427  

Inter-segment revenues

 353     91   89   88   85     343     89   91   82   81  

Total Bell Wireline operating revenues

 10,040     2,628   2,465   2,485   2,462     10,097     2,601   2,482   2,506   2,508  

Operating costs

 (6,272 )   (1,675 ) (1,533 ) (1,532 ) (1,532 )   (6,303 )   (1,667 ) (1,559 ) (1,527 ) (1,550 )

Adjusted EBITDA

 3,768     953   932   953   930     3,794     934   923   979   958  

Adjusted EBITDA Margin

 37.5 %   36.3 % 37.8 % 38.4 % 37.8 %   37.6 %   35.9 % 37.2 % 39.1 % 38.2 %
                                               

Capital expenditures

 2,334     667   609   595   463     2,247     702   562   523   460  

Capital intensity

 23.2 %   25.4 % 24.7 % 23.9 % 18.8 %   22.3 %   27.0 % 22.6 % 20.9 % 18.3 %

High-speed Internet

                                              

High-speed Internet net activations

 102,946     34,126   49,555   3,638   15,627     57,722     15,690   35,634   2,446   3,952  

High-speed Internet subscribers EOP

 2,287,489     2,287,489   2,253,363   2,203,808   2,200,170     2,184,543     2,184,543   2,168,853   2,133,219   2,130,773  

TV

                                              

Net subscriber activations

 98,452     24,437   24,494   20,960   28,561     122,450     36,189   46,685   25,605   13,971  

Fibe TV

 221,103     58,371   61,519   46,533   54,680     231,132     60,301   72,813   50,555   47,463  

Total subscribers EOP

 2,376,885     2,376,885   2,352,448   2,327,954   2,306,994     2,278,433     2,278,433   2,242,244   2,195,559   2,169,954  

Fibe TV

 700,533     700,533   642,162   580,643   534,110     479,430     479,430   419,129   346,316   295,761  

Local

                                              

NAS

                                              

Residential

 2,435,471     2,435,471   2,475,649   2,518,822   2,586,791     2,652,429     2,652,429   2,715,710   2,774,667   2,856,757  

Business

 2,457,765     2,457,765   2,484,292   2,516,146   2,554,225     2,589,820     2,589,820   2,622,298   2,650,824   2,679,736  

Total

 4,893,236     4,893,236   4,959,941   5,034,968   5,141,016     5,242,249     5,242,249   5,338,008   5,425,491   5,536,493  

NAS net (losses)/activations

                                              

Residential

 (216,958 )   (40,178 ) (43,173 ) (67,969 ) (65,638 )   (287,885 )   (63,281 ) (58,957 ) (82,090 ) (83,557 )

Business

 (132,055 )   (26,527 ) (31,854 ) (38,079 ) (35,595 )   (114,805 )   (32,478 ) (28,526 ) (28,912 ) (24,889 )

Total

 (349,013 )   (66,705 ) (75,027 ) (106,048 ) (101,233 )   (402,690 )   (95,759 ) (87,483 ) (111,002 ) (108,446 )

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 11

BCE (1)
Net debt and other information (2)

Net debt and preferred shares

                    

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

                    

 

        BCE          
                     

 

December 31,   September 30,   June 30,   March 31   December 31  

 

2014   2014   2014   2014   2013  

Debt due within one year

 3,743   3,194   2,736   3,201   2,571  

Long-term debt

 16,355   17,388   16,150   16,010   16,341  

Preferred shares - BCE (A)

 2,002   1,918   1,698   1,698   1,698  

Cash and cash equivalents

 (566 ) (1,406 ) (150 ) (720 ) (335 )

Net Debt (3)

 21,534   21,094   20,434   20,189   20,275  
                     

Net Debt / Adjusted EBITDA (4)

 2.59   2.55   2.48   2.48   2.51  

Adjusted EBITDA /Net interest expense, excluding interest on post-employment benefit obligations and including 50% of preferred dividends (4)

 8.38   8.37   8.19   8.12   8.17  

 

Bell Media Inc. - Proportionate Information

                                          

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

Total
2014		   Q4 2014   Q3 2014   Q2 2014   Q1 2014     Total
2013		   Q4 2013   Q3 2013   Q2 2013   Q1 2013  
                                           

Proportionate Net Debt

 -   -   -   14   30     103   103   143   202   206  

Proportionate Adjusted EBITDA

 657   181   158   189   129     593   209   172   134   78  

 

Cash Flow Information

                                      

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

 Q4
2014		   Q4
2013		   $ change  

% change

         Total
2014		   Total
2013		   $ change  

% change

  

Free Cash Flow (FCF) (3)

                                      

Cash from operating activities, excluding acquisition costs paid

 1,559   1,649   (90 ) (5.5 %)       5,680   5,521   159   2.9 %

Capital expenditures

 (1,035 ) (992 ) (43 ) (4.3 %)       (3,245 ) (3,001 ) (244 ) (8.1 %)

Dividends paid on preferred shares

 (40 ) (31 ) (9 ) (29.0 %)       (134 ) (127 ) (7 ) (5.5 %)

Dividends paid by subsidiaries to non-controlling interest

 (1 ) -   (1 ) n.m.         (2 ) (13 ) 11   84.6 %

Voluntary defined benefit pension plan contribution

 350   -   350   n.m.         350   -   350   n.m.  

Bell Aliant dividends to BCE

 -   48   (48 ) (100.0 %)       95   191   (96 ) (50.3 %)

FCF

 833   674   159   23.6 %       2,744   2,571   173   6.7 %
                                       

 

Cash Flow Information - Historical Trend

                                          

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

 Total
2014		   Q4
2014		   Q3
2014		   Q2
2014		   Q1
2014		     Total
2013		   Q4
2013		   Q3
2013		   Q2
2013		   Q1
2013		  

FCF

                                          

Cash from operating activities, excluding acquisition costs paid

 5,680   1,559   1,644   1,589   888     5,521   1,649   1,479   1,567   826  

Capital expenditures

 (3,245 ) (1,035 ) (825 ) (791 ) (594 )   (3,001 ) (992 ) (742 ) (673 ) (594 )

Dividends paid on preferred shares

 (134 ) (40 ) (31 ) (31 ) (32 )   (127 ) (31 ) (38 ) (32 ) (26 )

Dividends paid by subsidiaries to non-controlling interest

 (2 ) (1 ) (1 ) -   -     (13 ) -   -   (6 ) (7 )

Voluntary defined benefit pension plan contribution

 350   350   -   -   -     -   -   -   -   -  

Bell Aliant dividends to BCE

 95   -   47   48   -     191   48   48   47   48  

FCF

 2,744   833   834   815   262     2,571   674   747   903   247  
                                           

 

(A) Net debt includes 50% of preferred shares
n.m. : not meaningful

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 12

BCE (1)
Consolidated Statements of Financial Position (2)

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

 December 31
2014		     September 30
2014		     June 30
2014		     March 31
2014		     December 31
2013		  

ASSETS

                            

Current assets

                            

Cash

 142     141     125     99     220  

Cash equivalents

 424     1,265     25     621     115  

Trade and other receivables

 3,069     2,808     2,860     2,861     3,043  

Inventory

 333     424     384     380     383  

Prepaid expenses

 379     435     541     503     415  

Assets held for sale

 3     -     195     193     719  

Other current assets

 198     190     131     193     175  

Total current assets

 4,548     5,263     4,261     4,850     5,070  

Non-current assets

                            

Property, plant and equipment

 21,327     21,215     20,911     20,671     20,743  

Intangible assets

 10,224     10,026     10,019     9,526     9,552  

Deferred tax assets

 162     232     218     199     165  

Investments in associates and joint ventures

 776     776     771     789     775  

Other non-current assets

 875     758     679     752     698  

Goodwill

 8,385     8,373     8,364     8,376     8,381  

Total non-current assets

 41,749     41,380     40,962     40,313     40,314  

Total assets

 46,297     46,643     45,223     45,163     45,384  

LIABILITIES

                            

Current liabilities

                            

Trade payables and other liabilities

 4,398     3,949     3,798     3,661     4,339  

Interest payable

 145     145     137     145     147  

Dividends payable

 534     496     556     555     466  

Current tax liabilities

 269     330     268     191     367  

Debt due within one year

 3,743     3,194     2,736     3,201     2,571  

Total current liabilities

 9,089     8,114     7,495     7,753     7,890  

Non-current liabilities

                            

Long-term debt

 16,355     17,388     16,150     16,010     16,341  

Deferred tax liabilities

 1,321     1,157     1,106     1,217     1,318  

Post-employment benefit obligation

 2,772     3,437     3,241     2,744     2,127  

Other non-current liabilities

 1,521     1,516     1,480     1,458     1,458  

Total non-current liabilities

 21,969     23,498     21,977     21,429     21,244  

Total liabilities

 31,058     31,612     29,472     29,182     29,134  
                             

EQUITY

                            

Equity attributable to BCE shareholders

                            

Preferred shares

 4,004     3,836     3,395     3,395     3,395  

Common shares

 16,717     16,125     13,726     13,688     13,629  

Contributed surplus

 1,141     1,408     2,614     2,605     2,615  

Accumulated other comprehensive income (loss)

 97     83     (2 )   28     14  

Deficit

 (7,013 )   (6,962 )   (5,146 )   (4,933 )   (4,642 )

Total Equity attributable to BCE shareholders

 14,946     14,490     14,587     14,783     15,011  

Non-controlling interest

 293     541     1,164     1,198     1,239  

Total equity

 15,239     15,031     15,751     15,981     16,250  

Total liabilities and equity

 46,297     46,643     45,223     45,163     45,384  

Number of common shares outstanding

 840.3     828.3     778.1     777.3     775.9  

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 13

BCE (1)
Consolidated Cash Flow Data (2)

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

   Q4
2014		     Q4
2013		       $ change       TOTAL
2014		     TOTAL
2013		       $ change  

Net earnings

   594     593       1       2,718     2,388       330  

Adjustments to reconcile net earnings to cash flows from operating activities

                                          

Severance, acquisition and other costs

   58     48       10       216     406       (190 )

Depreciation and amortization

   852     855       (3 )     3,452     3,380       72  

Post-employment benefit plans cost

   93     109       (16 )     377     442       (65 )

Net interest expense

   236     239       (3 )     921     924       (3 )

(Losses) Gains on investments

   6     12       (6 )     (10 )   7       (17 )

Income taxes

   221     226       (5 )     929     828       101  

Contributions to post-employment benefit plans

   (428 )   (83 )     (345 )     (683 )   (341 )     (342 )

Payments under other post-employment benefit plans

   (19 )   (18 )     (1 )     (73 )   (73 )     -  

Severance and other costs paid

   (44 )   (65 )     21       (190 )   (203 )     13  

Acquisition costs paid

   (68 )   (30 )     (38 )     (131 )   (80 )     (51 )

Interest paid

   (233 )   (231 )     (2 )     (907 )   (879 )     (28 )

Income taxes paid (net of refunds)

   (180 )   (232 )     52       (743 )   (470 )     (273 )

Net change in operating assets and liabilities

   439     415       24       365     147       218  

Cash flows from operating activities

   1,527     1,838       (311 )     6,241     6,476       (235 )

Bell Aliant dividends paid to BCE

   -     48       (48 )     95     191       (96 )

Capital expenditures

   (1,076 )   (1,139 )     63       (3,717 )   (3,571 )     (146 )

Cash dividends paid on preferred shares

   (40 )   (31 )     (9 )     (134 )   (127 )     (7 )

Cash dividends paid by subsidiaries to non-controlling interest

   (1 )   (68 )     67       (145 )   (283 )     138  

Acquisition costs paid

   68     30       38       131     80       51  

Voluntary defined benefit pension plan contribution

   350     -       350       350     -       350  

Bell Aliant Free Cash Flow

   5     (4 )     9       (77 )   (195 )     118  

Free Cash Flow (3)

   833     674       159       2,744     2,571       173  

Bell Aliant free cash flow, excluding dividends paid

   (5 )   (44 )     39       (18 )   4       (22 )

Business acquisitions

   (8 )   (1 )     (7 )     (18 )   (2,850 )     2,832  

Acquisition costs paid

   (68 )   (30 )     (38 )     (131 )   (80 )     (51 )

Voluntary defined benefit pension plan contribution

   (350 )   -       (350 )     (350 )   -       (350 )

Business dispositions

   (4 )   -       (4 )     720     1       719  

Increase in investments

   (23 )   (1 )     (22 )     (38 )   (3 )     (35 )

Decrease in investments

   36     5       31       36     10       26  

Acquisition of spectrum licences

   -     -       -       (566 )   -       (566 )

Other investing activities

   -     -       -       13     12       1  

(Decrease) Increase in notes payable and bank advances

   (132 )   (240 )     108       469     272       197  

Reduction in securitized trade receivables

   -     -       -       -     (14 )     14  

Issue of long-term debt

   2     15       (13 )     1,428     4,438       (3,010 )

Repayment of long-term debt

   (445 )   (178 )     (267 )     (1,113 )   (2,495 )     1,382  

Early debt redemption costs

   (4 )   -       (4 )     (4 )   (55 )     51  

Cash dividends paid on common shares

   (481 )   (452 )     (29 )     (1,893 )   (1,795 )     (98 )

Privatization of Bell Aliant

   (185 )   -       (185 )     (989 )   -       (989 )

Issue of common shares

   6     -       6       49     13       36  

Issue of equity securities by subsidiaries to non-controlling interest

   -     -       -       -     230       (230 )

Other financing activities

   (12 )   (16 )     4       (108 )   (53 )     (55 )

 

  (1,673 )   (942 )     (731 )     (2,513 )   (2,365 )     (148 )

Net (decrease) increase in cash and cash equivalents

   (840 )   (268 )     (572 )     231     206       25  

Cash and cash equivalents at beginning of period

   1,406     603       803       335     129       206  

Cash and cash equivalents at end of period

   566     335       231       566     335       231  
                                           

Other information

                                          

Free cash flow per share (3)

 $ 1.01   $ 0.86     $ 0.15     $ 3.46   $ 3.31     $ 0.15  

Annualized cash flow yield (5)

   6.1 %   7.2 %     (1.1 ) pts     6.1 %   7.2 %     (1.1 ) pts

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 14

BCE
Consolidated Cash Flow Data - Historical Trend

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

   TOTAL
2014		       Q4 14     Q3 14     Q2 14     Q1 14       TOTAL
2013		       Q4 13     Q3 13     Q2 13     Q1 13  

Net earnings

   2,718       594     703     707     714       2,388       593     452     671     672  

Adjustments to reconcile net earnings to cash flows from operating activities

                                                                  

Severance, acquisition and other costs

   216       58     66     54     38       406       48     297     28     33  

Depreciation and amortization

   3,452       852     855     879     866       3,380       855     845     842     838  

Post-employment benefit plans cost

   377       93     91     94     99       442       109     112     107     114  

Net interest expense

   921       236     225     226     234       924       239     240     225     220  

(Gains) losses on investments

   (10 )     6     -     (4 )   (12 )     7       12     (2 )   (1 )   (2 )

Income taxes

   929       221     241     236     231       828       226     165     196     241  

Contributions to post-employment benefit plans

   (683 )     (428 )   (82 )   (85 )   (88 )     (341 )     (83 )   (84 )   (76 )   (98 )

Payments under other post-employment benefit plans

   (73 )     (19 )   (18 )   (18 )   (18 )     (73 )     (18 )   (19 )   (18 )   (18 )

Severance and other costs paid

   (190 )     (44 )   (40 )   (38 )   (68 )     (203 )     (65 )   (44 )   (45 )   (49 )

Acquisition costs paid

   (131 )     (68 )   (33 )   (16 )   (14 )     (80 )     (30 )   (32 )   (8 )   (10 )

Interest paid

   (907 )     (233 )   (214 )   (231 )   (229 )     (879 )     (231 )   (246 )   (206 )   (196 )

Income taxes paid (net of refunds)

   (743 )     (180 )   (92 )   (110 )   (361 )     (470 )     (232 )   (53 )   (37 )   (148 )

Net change in operating assets and liabilities

   365       439     180     156     (410 )     147       415     99     190     (557 )

Cash flows from operating activities

   6,241       1,527     1,882     1,850     982       6,476       1,838     1,730     1,868     1,040  

Bell Aliant dividends paid to BCE

   95       -     47     48     -       191       48     48     47     48  

Capital expenditures

   (3,717 )     (1,076 )   (975 )   (937 )   (729 )     (3,571 )     (1,139 )   (880 )   (830 )   (722 )

Cash dividends paid on preferred shares

   (134 )     (40 )   (31 )   (31 )   (32 )     (127 )     (31 )   (38 )   (32 )   (26 )

Cash dividends paid by subsidiaries to non-controlling interest

   (145 )     (1 )   (69 )   (68 )   (7 )     (283 )     (68 )   (68 )   (74 )   (73 )

Acquisition costs paid

   131       68     33     16     14       80       30     32     8     10  

Voluntary defined benefit pension plan contribution

   350       350     -     -     -       -       -     -     -     -  

Bell Aliant Free Cash Flow

   (77 )     5     (53 )   (63 )   34       (195 )     (4 )   (77 )   (84 )   (30 )

Free Cash Flow

   2,744       833     834     815     262       2,571       674     747     903     247  

Bell Aliant free cash flow, excluding dividends paid

   (18 )     (5 )   6     15     (34 )     4       (44 )   29     37     (18 )

Business acquisitions

   (18 )     (8 )   (10 )   -     -       (2,850 )     (1 )   (2,844 )   -     (5 )

Acquisition costs paid

   (131 )     (68 )   (33 )   (16 )   (14 )     (80 )     (30 )   (32 )   (8 )   (10 )

Voluntary defined benefit pension plan contribution

   (350 )     (350 )   -     -     -       -       -     -     -     -  

Business dispositions

   720       (4 )   186     -     538       1       -     -     1     -  

Increase in investments

   (38 )     (23 )   (9 )   -     (6 )     (3 )     (1 )   (1 )   (1 )   -  

Decrease in investments

   36       36     -     -     -       10       5     -     3     2  

Acquisition of spectrum licences

   (566 )     -     -     (453 )   (113 )     -       -     -     -     -  

Other investing activities

   13       -     10     2     1       12       -     (2 )   14     -  

Increase (decrease) in notes payable and bank advances

   469       (132 )   443     (443 )   601       272       (240 )   495     (321 )   338  

Reduction in securitized trade receivables

   -       -     -     -     -       (14 )     -     -     -     (14 )

Issue of long-term debt

   1,428       2     1,243     150     33       4,438       15     2,008     1,408     1,007  

Repayment of long-term debt

   (1,113 )     (445 )   (117 )   (136 )   (415 )     (2,495 )     (178 )   (1,515 )   (513 )   (289 )

Early debt redemption costs

   (4 )     (4 )   -     -     -       (55 )     -     (28 )   (10 )   (17 )

Cash dividends paid on common shares

   (1,893 )     (481 )   (480 )   (480 )   (452 )     (1,795 )     (452 )   (451 )   (452 )   (440 )

Privatization of Bell Aliant

   (989 )     (185 )   (804 )   -     -       -       -     -     -     -  

Issue of common shares

   49       6     2     9     32       13       -     -     -     13  

Issue of equity securities by subsidiaries to non-controlling interest

   -       -     -     -     -       230       -     -     -     230  

Other financing activities

   (108 )     (12 )   (15 )   (33 )   (48 )     (53 )     (16 )   (11 )   (8 )   (18 )

 

  (2,513 )     (1,673 )   422     (1,385 )   123       (2,365 )     (942 )   (2,352 )   150     779  

Net increase (decrease) in cash and cash equivalents

   231       (840 )   1,256     (570 )   385       206       (268 )   (1,605 )   1,053     1,026  

Cash and cash equivalents at beginning of period

   335       1,406     150     720     335       129       603     2,208     1,155     129  

Cash and cash equivalents at end of period

   566       566     1,406     150     720       335       335     603     2,208     1,155  
                                                                   

Other information

                                                                  

Free cash flow per share

 $ 3.46    

$

 1.01  

  $

 1.06  

  $

 1.05  

 $

0.34    

$

 3.31    

$

 0.86  

  $

 0.97  

  $

 1.16  

  $

 0.32  

Annualized cash flow yield

   6.1 %     6.1 %   6.5 %   6.6 %   7.0 %     7.2 %     7.2 %   7.3 %   7.3 %   6.4 %

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 15

Accompanying Notes

  At December 31, 2014, we report our results of operations in four segments: Bell Wireless, Bell Wireline, 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.
 
(1) Throughout this report, we, us, our, the company and BCE mean, as the context may require, either BCE Inc. or, collectively, BCE Inc., its subsidiaries, joint arrangements and associates; Bell means our Bell Wireless, Bell Wireline and Bell Media segments on an aggregate basis; and Bell Aliant means, as the context may require, Bell Aliant Inc. or, collectively, Bell Aliant Inc., its subsidiaries and associates.
 
(2) On October 31, 2014, BCE completed the acquisition of all the issued and outstanding shares of Bell Aliant that it did not already own, therefore eliminating the 55.9% ownership interest held by non-controlling interest.

On July 5, 2013, BCE acquired 100% of the issued and outstanding shares of Astral Media Inc. (Astral).
 
(3) Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA margin

Beginning with Q2 2014, we reference Adjusted EBITDA and Adjusted EBITDA margin as non-GAAP financial measures. These terms replace the previously referenced non-GAAP financial measures EBITDA and EBITDA margin. Our definition of Adjusted EBITDA and Adjusted EBITDA margin are unchanged from our former definition of EBITDA and EBITDA margin respectively. Accordingly, this change in terminology has no impact on our reported financial results for prior periods.

The terms Adjusted EBITDA and Adjusted EBITDA margin do not have any standardized meaning under International Financial Reporting Standards (IFRS). Therefore, they are unlikely to be comparable to similar measures presented by other issuers.

We define Adjusted EBITDA as operating revenues less operating costs (including post-employment benefit plans service cost). We define Adjusted EBITDA margin as Adjusted EBITDA divided by operating revenues.

We use Adjusted EBITDA and Adjusted EBITDA margin to evaluate the performance of our businesses as they reflect their ongoing profitability. We believe that certain investors and analysts use Adjusted 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. We believe that certain investors and analysts also use Adjusted EBITDA and Adjusted EBITDA margin to evaluate the performance of our businesses. Adjusted EBITDA also is one component in the determination of short-term incentive compensation for all management employees.

Adjusted EBITDA and Adjusted EBITDA margin have no directly comparable IFRS financial measure. Alternatively, Adjusted EBITDA 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 under IFRS. Therefore, they are unlikely to be comparable to similar measures presented by other issuers.

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

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 16

Accompanying Notes

  We use Adjusted net earnings and Adjusted EPS and we believe that certain investors and analysts use these measures, among other ones, to assess the performance of our businesses without the effects of severance, acquisition and other costs, net (gains) losses on investments, and early debt redemption costs, 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.

Free Cash Flow and Free Cash Flow per share

The terms free cash flow and free cash flow per share do not have any standardized meaning under IFRS. Therefore, they are unlikely to be comparable to similar measures presented by other issuers.

As of November 1, 2014, BCE’s free cash flow includes 100% of Bell Aliant’s free cash flow rather than cash dividends received from Bell Aliant. We define free cash flow as cash flows from operating activities, excluding acquisition costs paid and voluntary pension funding, less capital expenditures, preferred share dividends, and dividends paid by subsidiaries to non-controlling interest.

Prior to November 1, 2014, free cash flow was defined as cash flows from operating activities, excluding acquisition costs paid and voluntary pension funding, plus dividends received from Bell Aliant, less capital expenditures, preferred share dividends, dividends paid by subsidiaries to non-controlling interest and Bell Aliant free cash flow.

We define free cash flow per share as follows:

Free cash flow
Average number of common shares outstanding

We consider free cash flow and free cash flow per share to be important indicators of the financial strength and performance of our businesses because they show how much cash is available to pay dividends, repay debt and reinvest in our company.

We believe that certain investors and analysts use free cash flow to value a business and its underlying assets. We believe that certain investors and analysts also use free cash flow and free cash flow per share to evaluate the financial strength and performance of our businesses.

For free cash flow, the most comparable IFRS financial measure is cash flows from operating activities.

Net debt

The term net debt does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers.

As of Q4 2014, we report net debt at the BCE level as opposed to the Bell level. Comparative figures are also reported at the BCE level.

We define net debt as debt due within one year plus long-term debt and 50% of preferred shares less cash and cash equivalents. We include 50% of outstanding preferred shares in our net debt as it is consistent with the treatment by certain credit rating agencies.

 

BCE Supplementary Financial Information - Fourth Quarter 2014 Page 17

Accompanying Notes

  We consider net debt to be an important indicator of the company’s financial leverage because it represents the amount of debt that is not covered by available cash and cash equivalents. We believe that certain investors and analysts use net debt to determine a company’s financial leverage.

Net debt has no directly comparable IFRS financial measure, but rather is calculated using several asset and liability categories from the statements of financial position, as shown in this document.
 
(4) Key Performance Indicators (KPIs)

We use a number of KPIs to measure the success of our strategic imperatives. These KPIs are not accounting measures and may not be comparable to similar measures presented by other issuers.

Capital Intensity is capital expenditures divided by operating revenues.

Average revenue per user or subscriber (ARPU) represents the measurement of certain service revenues divided by the average subscriber base for the specified period.

Churn is the rate at which existing subscribers cancel their services, expressed as a percentage. Churn is calculated as the number of subscribers disconnected divided by the average subscriber base. It is a measure of monthly customer turnover.

Cost of acquisition (COA) is also referred to as subscriber acquisition costs. COA represents the total cost associated with acquiring a customer and includes costs such as hardware discounts, marketing and distribution costs. This measure is expressed per gross activation during the period.

Net debt to Adjusted EBITDA
As of Q4 2014, we report Net debt to Adjusted EBITDA ratio at the BCE level as opposed to the Bell level. Comparative figures are also reported at the BCE level.

Net debt to Adjusted EBITDA is BCE Net debt divided by Adjusted EBITDA. Net debt is debt due within one year plus long-term debt and 50% of preferred shares less cash and cash equivalents. For the purposes of calculating our net debt to Adjusted EBITDA ratio, Adjusted EBITDA is defined as twelve-month trailing BCE Adjusted EBITDA.

Adjusted EBITDA to net interest expense
As of Q4 2014, we report Adjusted EBITDA to net interest expense ratio at the BCE level as opposed to the Bell level. Comparative figures are also reported at the BCE level.

Adjusted EBITDA to net interest expense is Adjusted EBITDA divided by net interest expense. For the purposes of calculating our Adjusted EBITDA to net interest expense ratio, Adjusted EBITDA is defined as twelve-month trailing BCE Adjusted EBITDA. Net interest expense is twelve-month trailing BCE interest expense excluding interest on post-employment benefit obligations and including 50% of preferred dividends.
 
(5) 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 Supplementary Financial Information - Fourth Quarter 2014 Page 18