EX-99.2 3 supp_q115.htm SUPPLEMENTARY FINANCIAL INFORMATION - FIRST QUARTER 2015 Supplementary Financial Information

Exhibit 99.2

 BCE (1)
Consolidated Operational Data (2)

(In millions of Canadian dollars, except share amounts) (unaudited)   Q1
2015		     Q1
2014		       $ change   % change  

Operating revenues

   5,240     5,099       141   2.8 %

Operating costs (A)

   (3,070 )   (3,003 )     (67 ) (2.2 %)

Post-employment benefit plans service cost

   (76 )   (74 )     (2 ) (2.7 %)

Adjusted EBITDA (3)

   2,094     2,022       72   3.6 %

Adjusted EBITDA margin (3)

   40.0 %   39.7 %         0.3 pts

Severance, acquisition and other costs

   (224 )   (38 )     (186 ) n.m.  

Depreciation

   (712 )   (699 )     (13 ) (1.9 %)

Amortization

   (127 )   (167 )     40   24.0 %

Finance costs

                        

Interest expense

   (226 )   (235 )     9   3.8 %

Interest on post-employment benefit obligations

   (27 )   (25 )     (2 ) (8.0 %)

Other (expense) income

   (20 )   87       (107 ) n.m.  

Income taxes

   (175 )   (231 )     56   24.2 %

Net earnings

   583     714       (131 ) (18.3 %)

Net earnings attributable to:

                        

Common shareholders

   532     615       (83 ) (13.5 %)

Preferred shareholders

   38     33       5   15.2 %

Non-controlling interest

   13     66       (53 ) (80.3 %)

Net earnings

   583     714       (131 ) (18.3 %)

Net earnings per common share - basic

$

0.63

 

$

0.79

 

 

$

(0.16

)

(20.3

%)

Net earnings per common share - diluted

 $ 0.63   $ 0.79     $ (0.16 ) (20.3 %)

Dividends per common share

$

0.6500

 

$

0.6175

 

 

$

0.0325

 

5.3

%

Average number of common shares outstanding - basic (millions)

   841.0     776.5              

Average number of common shares outstanding - diluted (millions)

   842.6     777.2              

Number of common shares outstanding (millions)

   841.9     777.3              
                         

Adjusted Net Earnings and EPS

                        

Net earnings attributable to common shareholders

   532     615       (83 ) (13.5 %)

Severance, acquisition and other costs

   164     23       141   n.m.  

Net losses (gains) on investments

   2     (12 )     14   n.m.  

Early debt redemption costs

   7     -       7   n.m.  

Adjusted net earnings (3)

   705     626       79   12.6 %

Impact on net earnings per share

 $ 0.21   $ 0.02     $ 0.19   n.m.  
                         

Adjusted EPS (3)

 $ 0.84   $ 0.81     $ 0.03   3.7 %
                         

 

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

 

BCE Supplementary Financial Information - First Quarter 2015 Page 2

 

BCE
Consolidated Operational Data - Historical Trend

(In millions of Canadian dollars, except share amounts) (unaudited)   Q1 15        TOTAL
2014		       Q4 14     Q3 14     Q2 14     Q1 14  

Operating revenues

   5,240        21,042       5,528     5,195     5,220     5,099  

Operating costs (A)

   (3,070 )     (12,463 )     (3,438 )   (3,014 )   (3,008 )   (3,003 )

Post-employment benefit plans service cost

   (76 )     (276 )     (68 )   (66 )   (68 )   (74 )

Adjusted EBITDA

   2,094       8,303       2,022     2,115     2,144     2,022  

Adjusted EBITDA margin

   40.0 %     39.5 %     36.6 %   40.7 %   41.1 %   39.7 %

Severance, acquisition and other costs

   (224 )     (216 )     (58 )   (66 )   (54 )   (38 )

Depreciation

   (712 )      (2,880 )     (734 )   (739 )   (708 )   (699 )

Amortization

   (127 )     (572 )     (118 )   (116 )   (171 )   (167 )

Finance costs

                                        

Interest expense

   (226 )     (929 )     (238 )   (227 )   (229 )   (235 )

Interest on post-employment benefit obligations

   (27 )     (101 )     (25 )   (25 )   (26 )   (25 )

Other (expense) income

   (20 )     42       (34 )   2     (13 )   87  

Income taxes

   (175 )      (929 )     (221 )   (241 )   (236 )   (231 )

Net earnings

   583       2,718       594     703     707     714  

Net earnings attributable to:

                                        

Common shareholders

   532       2,363       542     600     606     615  

Preferred shareholders

   38       137       40     31     33     33  

Non-controlling interest

   13       218       12     72     68     66  

Net earnings

   583       2,718       594     703     707     714  

 

                                        

Net earnings per common share - basic

$ 0.63     $ 2.98     $ 0.64   $ 0.77   $ 0.78   $ 0.79  

Net earnings per common share - diluted

 $ 0.63     $ 2.97     $ 0.63   $ 0.77   $ 0.78   $ 0.79  

 

                                        

Dividends per common share

 $ 0.6500     $ 2.4700     $ 0.6175   $ 0.6175   $ 0.6175   $ 0.6175  

Average number of common shares outstanding - basic (millions)

 

841.0

 

 

 

793.7

 

 

 

837.7

 

 

782.1

 

 

777.7

 

 

776.5

 

Average number of common shares outstanding - diluted (millions)

   842.6       794.6       838.9     783.0     778.6     777.2  

Number of common shares outstanding (millions)

   841.9       840.3       840.3     828.3     778.1     777.3  

 

                                        

Adjusted Net Earnings and EPS

                                        

Net earnings attributable to common shareholders

   532       2,363       542     600     606     615  

Severance, acquisition and other costs

   164       148       42     45     38     23  

Net losses (gains) on investments

   2       (8 )     8     -     (4 )   (12 )

Early debt redemption costs

   7       21       18     3     -     -  

Adjusted net earnings

   705       2,524       610     648     640     626  

Impact on net earnings per share

 $ 0.21     $ 0.20     $ 0.08   $ 0.06   $ 0.04   $ 0.02  

 

                                        

Adjusted EPS

 $ 0.84     $ 3.18     $ 0.72   $ 0.83   $ 0.82   $ 0.81  

 

(A) Excludes post-employment benefit plans service cost

 

BCE Supplementary Financial Information - First Quarter 2015 Page 3

 

BCE (1)
Segmented Data (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1
2015		   Q1
2014		     $ change  

% change

  

 

                  

Revenues

                  

Bell Wireless

 1,637   1,492     145   9.7 %

Bell Wireline

 3,027   3,019     8   0.3 %

Bell Media

 726   722     4   0.6 %

Inter-segment eliminations

 (150 ) (134 )   (16 ) (11.9 %)

Total

 5,240   5,099     141   2.8 %
                   

Operating costs

 

 

 

 

 

 

 

 

 

Bell Wireless

 (925 ) (849 )   (76 ) (9.0 %)

Bell Wireline

 (1,786 ) (1,790 )   4   0.2 %

Bell Media

 (585 ) (572 )   (13 ) (2.3 %)

Inter-segment eliminations

 150   134     16   11.9 %

Total

 (3,146 ) (3,077 )   (69 ) (2.2 %)
                   

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

Bell Wireless

 712   643     69   10.7 %

Margin

 43.5 % 43.1 %       0.4 pts

Bell Wireline

 1,241   1,229     12   1.0 %

Margin

 41.0 % 40.7 %       0.3 pts

Bell Media

 141   150     (9 ) (6.0 %)

Margin

 19.4 % 20.8 %       (1.4 ) pts

Total

 2,094   2,022     72   3.6 %

Margin

 40.0 % 39.7 %       0.3 pts

 

                  

Capital expenditures

                  

Bell Wireless

 151   119     (32 ) (26.9 %)

Capital Intensity (4)

 9.2 % 8.0 %       (1.2 ) pts

Bell Wireline

 656   596     (60 ) (10.1 %)

Capital Intensity

 21.7 % 19.7 %       (2.0 ) pts

Bell Media

 20   14     (6 ) (42.9 %)

Capital Intensity

 2.8 % 1.9 %       (0.9 ) pts

Total

 827   729     (98 ) (13.4 %)

Capital Intensity

 15.8 % 14.3 %       (1.5 ) pts

 

                  

 

BCE Supplementary Financial Information - First Quarter 2015 Page 4

 

BCE
Segmented Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 15   TOTAL
2014		   Q4 14   Q3 14   Q2 14   Q1 14  

 

                        

Revenues

                        

Bell Wireless

 1,637   6,327   1,671   1,621   1,543   1,492  

Bell Wireline

 3,027   12,324   3,210   3,046   3,049   3,019  

Bell Media

 726   2,937   789   665   761   722  

Inter-segment eliminations

 (150 ) (546 ) (142 ) (137 ) (133 ) (134 )

Total

 5,240   21,042   5,528   5,195   5,220   5,099  

 

                        

Operating costs

                        

Bell Wireless

 (925 ) (3,703 ) (1,071 ) (921 ) (862 ) (849 )

Bell Wireline

 (1,786 ) (7,379 ) (1,980 ) (1,813 ) (1,796 ) (1,790 )

Bell Media

 (585 ) (2,203 ) (597 ) (483 ) (551 ) (572 )

Inter-segment eliminations

 150   546   142   137   133   134  

Total

 (3,146 ) (12,739 ) (3,506 ) (3,080 ) (3,076 ) (3,077 )

 

                        

Adjusted EBITDA

                        

Bell Wireless

 712   2,624   600   700   681   643  

Margin

 43.5 % 41.5 % 35.9 % 43.2 % 44.1 % 43.1 %

Bell Wireline

 1,241   4,945   1,230   1,233   1,253   1,229  

Margin

 41.0 % 40.1 % 38.3 % 40.5 % 41.1 % 40.7 %

Bell Media

 141   734   192   182   210   150  

Margin

 19.4 % 25.0 % 24.3 % 27.4 % 27.6 % 20.8 %

Total

 2,094   8,303   2,022   2,115   2,144   2,022  

Margin

 40.0 % 39.5 % 36.6 % 40.7 % 41.1 % 39.7 %

 

                        

Capital expenditures

                        

Bell Wireless

 151   687   218   182   168   119  

Capital Intensity

 9.2 % 10.9 % 13.0 % 11.2 % 10.9 % 8.0 %

Bell Wireline

 656   2,893   804   756   737   596  

Capital Intensity

 21.7 % 23.5 % 25.0 % 24.8 % 24.2 % 19.7 %

Bell Media

 20   137   54   37   32   14  

Capital Intensity

 2.8 % 4.7 % 6.8 % 5.6 % 4.2 % 1.9 %

Total

 827   3,717   1,076   975   937   729  

Capital Intensity

 15.8 % 17.7 % 19.5 % 18.8 % 18.0 % 14.3 %

 

BCE Supplementary Financial Information - First Quarter 2015 Page 5

 

Bell Wireless (1) (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1
2015		   Q1
2014		    

% change

  

Bell Wireless

              

Revenues

              

Service

 1,500   1,388     8.1 %

Product

 127   94     35.1 %

Total external Bell Wireless revenues

 1,627   1,482     9.8 %

Inter-segment

 10   10     0.0 %

Total Bell Wireless operating revenues

 1,637   1,492     9.7 %

Operating costs

 (925 ) (849 )   (9.0 %)

Adjusted EBITDA

 712   643     10.7 %

Adjusted EBITDA margin (Total revenues)

 43.5 % 43.1 %   0.4 pts

Adjusted EBITDA margin (Service revenues)

 47.5 % 46.3 %   1.2 pts

 

              

Capital expenditures

 151   119     (26.9 %)

Capital intensity

 9.2 % 8.0 %   (1.2 ) pts

Wireless gross activations

341,360

 

358,324

 

 

(4.7

%)

Postpaid

278,984

 

279,527

 

 

(0.2

%)

Wireless net activations

(15,914

)

(16,436

)

  

3.2

%

Postpaid

35,373

 

34,104

 

 

3.7

%

Wireless subscribers end of period (EOP)

8,102,714

 

7,908,596

 

 

2.5

%

Postpaid

7,145,420

 

6,832,197

 

 

4.6

%

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

 60.83   57.75     5.3 %

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

1.47

%

1.58

%

  

0.11

pts

Prepaid

3.60

%

3.68

%

  

0.08

pts

Postpaid

 1.18 % 1.24 %   0.06 pts

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

 452   439     (3.0 %)
               

 

BCE Supplementary Financial Information - First Quarter 2015 Page 6

 

Bell Wireless - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 15     TOTAL
2014		     Q4 14   Q3 14   Q2 14   Q1 14  

Bell Wireless

                            

Revenues

                            

Service

 1,500     5,806     1,494   1,495   1,429   1,388  

Product

 127     483     167   117   105   94  

Total external Bell Wireless revenues

 1,627     6,289     1,661   1,612   1,534   1,482  

Inter-segment

 10     38     10   9   9   10  

Total Bell Wireless operating revenues

 1,637     6,327     1,671   1,621   1,543   1,492  

Operating costs

 (925 )   (3,703 )   (1,071 ) (921 ) (862 ) (849 )

Adjusted EBITDA

 712     2,624     600   700   681   643  

Adjusted EBITDA margin (Total revenues)

 43.5 %   41.5 %   35.9 % 43.2 % 44.1 % 43.1 %

Adjusted EBITDA margin (Service revenues)

 47.5 %   45.2 %   40.2 % 46.8 % 47.7 % 46.3 %

 

                            

Capital expenditures

 151     687     218   182   168   119  

Capital intensity

9.2

%

 

10.9

%

 

13.0

%

11.2

%

10.9

%

8.0

%

 

                            

Wireless gross activations

 341,360     1,643,451     462,285   431,460   391,382   358,324  

Postpaid

 278,984     1,291,207     382,455   331,851   297,374   279,527  

Wireless net activations

 (15,914 )   193,596     83,498   83,636   42,898   (16,436 )

Postpaid

 35,373     311,954     118,120   91,779   67,951   34,104  

Wireless subscribers EOP

 8,102,714     8,118,628     8,118,628   8,035,130   7,951,494   7,908,596  

Postpaid

 7,145,420     7,110,047     7,110,047   6,991,927   6,900,148   6,832,197  

ARPU ($/month)

 60.83     59.92     60.97   61.59   59.35   57.75  

Churn (%)(average per month)

 1.47 %   1.52 %   1.57 % 1.45 % 1.47 % 1.58 %

Prepaid

 3.60 %   3.44 %   3.43 % 3.14 % 3.49 % 3.68 %

Postpaid

 1.18 %   1.22 %   1.29 % 1.20 % 1.15 % 1.24 %

COA ($/subscriber)

 452     441     495   420   403   439  

 

BCE Supplementary Financial Information - First Quarter 2015 Page 7

 

Bell Wireline (1) (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1
2015		   Q1
2014		    

% change

  

Bell Wireline

              

Data

 1,757   1,698     3.5 %

Local & access

 824   867     (5.0 %)

Long distance

 213   226     (5.8 %)

Equipment & other

 173   178     (2.8 %)

Total external revenues

 2,967   2,969     (0.1 %)

Inter-segment revenues

 60   50     20.0 %

Total Bell Wireline operating revenues

 3,027   3,019     0.3 %

Operating costs

 (1,786 ) (1,790 )   0.2 %

Adjusted EBITDA

 1,241   1,229     1.0 %

Adjusted EBITDA Margin

 41.0 % 40.7 %   0.3 pts

 

              

Capital expenditures

 656   596     (10.1 %)

Capital intensity

21.7

%

19.7

%

 

(2.0

) pts

High-speed Internet

              

High-speed Internet net activations

 39,650   26,582     49.2 %

High-speed Internet subscribers EOP (A) (B)

3,297,745

 

3,163,218

 

 

4.3

%

TV

              

Net subscriber activations

 26,990   40,223     (32.9 %)

Internet Protocol Television (IPTV)

 60,863   66,378     (8.3 %)

Total subscribers EOP (A) (B)

 2,658,106   2,529,471     5.1 %

IPTV (A) (B)

990,325

 

723,891

 

 

36.8

%

Local

              

Network Access Services (NAS)

              

Residential (A) (B)

 3,745,986   4,031,682     (7.1 %)

Business

 3,271,175   3,431,147     (4.7 %)

Total (A) (B)

 7,017,161   7,462,829     (6.0 %)

NAS net (losses)/activations

              

Residential

 (65,870 ) (89,655 )   26.5 %

Business

 (44,069 ) (43,085 )   (2.3 %)

Total

 (109,939 ) (132,740 )   17.2 %

 

(A) Our Q1 2015 Internet, IPTV, total TV, and NAS subscriber base included a beginning of period adjustment to reduce the number of subscribers by 7,505, 2,236, 7,702, and 4,409, respectively, for deactivations as a result of the CRTC’s decision to eliminate the 30-day notice period required to cancel services.
(B) Subsequent to a review of our subscriber metrics, our Q1 2015 beginning of period Internet, IPTV and total TV subscriber base was reduced by 31,426, 1,849 and 3,790, respectively, while our NAS base was increased by 657 subscribers. These adjustments primarily consisted of older balances.

 

BCE Supplementary Financial Information - First Quarter 2015 Page 8

 

Bell Wireline - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 15     TOTAL
2014		   Q4 14   Q3 14   Q2 14   Q1 14  

Bell Wireline

                          

Data

 1,757     6,978   1,833   1,722   1,725   1,698  

Local & access

 824     3,420   838   855   860   867  

Long distance

 213     922   234   229   233   226  

Equipment & other

 173     791   248   186   179   178  

Total external revenues

 2,967     12,111   3,153   2,992   2,997   2,969  

Inter-segment revenues

 60     213   57   54   52   50  

Total Bell Wireline operating revenues

 3,027     12,324   3,210   3,046   3,049   3,019  

Operating costs

 (1,786 )   (7,379 ) (1,980 ) (1,813 ) (1,796 ) (1,790 )

Adjusted EBITDA

 1,241     4,945   1,230   1,233   1,253   1,229  

Adjusted EBITDA Margin

 41.0 %   40.1 % 38.3 % 40.5 % 41.1 % 40.7 %

 

                           

Capital expenditures

 656     2,893   804   756   737   596  

Capital intensity

21.7

%

 

23.5

%

25.0

%

24.8

%

24.2

%

19.7

%

High-speed Internet

 

 

 

 

 

 

 

 

 

 

 

 

 

High-speed Internet net activations

 39,650     160,390   52,010   64,254   17,544   26,582  

High-speed Internet subscribers EOP (A) (B)

3,297,745

 

 

3,297,026

 

3,297,026

 

3,245,016

 

3,180,762

 

3,163,218

 

TV

 

 

 

 

 

 

 

 

 

 

 

 

 

Net subscriber activations

 26,990     153,360   42,190   37,578   33,369   40,223  

IPTV

 60,863     276,034   76,074   74,450   59,132   66,378  

Total subscribers EOP (A) (B)

 2,658,106     2,642,608   2,642,608   2,600,418   2,562,840   2,529,471  

IPTV (A) (B)

990,325

 

 

933,547

 

933,547

 

857,473

 

783,023

 

723,891

 

Local

 

 

 

 

 

 

 

 

 

 

 

 

 

NAS

                          

Residential (A) (B)

 3,745,986     3,815,608   3,815,608   3,872,840   3,943,622   4,031,682  

Business

 3,271,175     3,315,244   3,315,244   3,351,017   3,388,287   3,431,147  

Total (A) (B)

 7,017,161     7,130,852   7,130,852   7,223,857   7,331,909   7,462,829  

NAS net (losses)/activations

                          

Residential

 (65,870 )   (305,729 ) (57,232 ) (70,782 ) (88,060 ) (89,655 )

Business

 (44,069 )   (158,988 ) (35,773 ) (37,270 ) (42,860 ) (43,085 )

Total

 (109,939 )   (464,717 ) (93,005 ) (108,052 ) (130,920 ) (132,740 )

 

(A) Our Q1 2015 Internet, IPTV, total TV, and NAS subscriber base included a beginning of period adjustment to reduce the number of subscribers by 7,505, 2,236, 7,702, and 4,409, respectively, for deactivations as a result of the CRTC’s decision to eliminate the 30-day notice period required to cancel services.
(B) Subsequent to a review of our subscriber metrics, our Q1 2015 beginning of period Internet, IPTV and total TV subscriber base was reduced by 31,426, 1,849 and 3,790, respectively, while our NAS base was increased by 657 subscribers. These adjustments primarily consisted of older balances.

 

BCE Supplementary Financial Information - First Quarter 2015 Page 9

 

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

BCE - Net debt and preferred shares

        

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

        

 

March 31   December 31  

 

2015   2014  

 

        

Debt due within one year

 4,712   3,743  

Long-term debt

 16,612   16,355  

Preferred shares - BCE (A)

 2,002   2,002  

Cash and cash equivalents

 (1,125 ) (566 )

Net Debt (3)

 22,201   21,534  

 

        

Net Debt / Adjusted EBITDA (4)

 2.65   2.59  

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

 8.52   8.38  

 

Bell Media Inc. - Proportionate Information

              

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

Q1 2015

   Total
2014		 Q4 2014 Q3 2014 Q2 2014 Q1 2014

 

 

            

Proportionate Net Debt

-

   - - - 14 30

Proportionate Adjusted EBITDA

121

   657 181 158 189 129
               

 

Cash Flow Information

                

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

 Q1
2015		   Q1
2014		   $ change  

% change

  

Free Cash Flow (FCF) (3)

                

Cash from operating activities, excluding acquisition costs paid

 1,097   888   209   23.5 %

Capital expenditures

 (827 ) (594 ) (233 ) (39.2 %)

Dividends paid on preferred shares

 (39 ) (32 ) (7 ) (21.9 %)

FCF

 231   262   (31 ) (11.8 %)
                 

 

Cash Flow Information - Historical Trend

                          

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

                                        

  

Q1     Total   Q4   Q3   Q2   Q1  
  2015     2014   2014   2014   2014   2014  

FCF

                          

Cash from operating activities, excluding acquisition costs paid

 1,097     5,680   1,559   1,644   1,589   888  

Capital expenditures

 (827 )   (3,245 ) (1,035 ) (825 ) (791 ) (594 )

Dividends paid on preferred shares

 (39 )   (134 ) (40 ) (31 ) (31 ) (32 )

Dividends paid by subsidiaries to non-controlling interest

 -     (2 ) (1 ) (1 ) -   -  

Voluntary defined benefit pension plan contribution

 -     350   350   -   -   -  

Bell Aliant dividends to BCE

 -     95   -   47   48   -  

FCF

 231     2,744   833   834   815   262  
                           

 

(A) Net debt includes 50% of preferred shares

 

BCE Supplementary Financial Information - First Quarter 2015 Page 10

 

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

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) March 31
2015		     December 31
2014		  

ASSETS

          

Current assets

          

Cash

 127     142  

Cash equivalents

 998     424  

Trade and other receivables

 2,781     3,069  

Inventory

 403     333  

Prepaid expenses

 522     379  

Other current assets

 249     201  

Total current assets

 5,080     4,548  

Non-current assets

          

Property, plant and equipment

 21,347     21,327  

Intangible assets

 10,332     10,224  

Deferred tax assets

 162     162  

Investments in associates and joint ventures

 790     776  

Other non-current assets

 989     875  

Goodwill

 8,376     8,385  

Total non-current assets

 41,996     41,749  

Total assets

 47,076     46,297  

LIABILITIES

          

Current liabilities

          

Trade payables and other liabilities

 4,007     4,398  

Interest payable

 143     145  

Dividends payable

 561     534  

Current tax liabilities

 74     269  

Debt due within one year

 4,712     3,743  

Total current liabilities

 9,497     9,089  

Non-current liabilities

          

Long-term debt

 16,612     16,355  

Deferred tax liabilities

 1,352     1,321  

Post-employment benefit obligation

 2,803     2,772  

Other non-current liabilities

 1,493     1,521  

Total non-current liabilities

 22,260     21,969  

Total liabilities

 31,757     31,058  

 

          

EQUITY

          

Equity attributable to BCE shareholders

          

Preferred shares

 4,004     4,004  

Common shares

 16,790     16,717  

Contributed surplus

 1,121     1,141  

Accumulated other comprehensive income

 124     97  

Deficit

 (7,027 )   (7,013 )

Total Equity attributable to BCE shareholders

 15,012     14,946  

Non-controlling interest

 307     293  

Total equity

 15,319     15,239  

Total liabilities and equity

 47,076     46,297  

Number of common shares outstanding

 841.9     840.3  

 

BCE Supplementary Financial Information - First Quarter 2015 Page 11

 

BCE (1)
Consolidated Cash Flow Data (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)   Q1
2015		      Q1
2014		       $ change  

 

                    

Net earnings

   583      714       (131 )

Adjustments to reconcile net earnings to cash flows from operating activities

                     

Severance, acquisition and other costs

   224      38       186  

Depreciation and amortization

   839       866       (27 )

Post-employment benefit plans cost

   103      99       4  

Net interest expense

   223      234       (11 )

Losses (gains) on investments

   2     (12 )     14  

Income taxes

   175      231       (56 )

Contributions to post-employment benefit plans

   (81 )    (88 )     7  

Payments under other post-employment benefit plans

   (20 )    (18 )     (2 )

Severance and other costs paid

   (49 )    (68 )     19  

Acquisition costs paid

   (52 )    (14 )     (38 )

Interest paid

   (227 )    (229 )     2  

Income taxes paid (net of refunds)

   (333 )    (361 )     28  

Net change in operating assets and liabilities

   (342 )    (410 )     68  

Cash flows from operating activities

   1,045      982       63  

Capital expenditures

   (827 )    (729 )     (98 )

Cash dividends paid on preferred shares

   (39 )    (32 )     (7 )

Cash dividends paid by subsidiaries to non-controlling interest

   -      (7 )     7  

Acquisition costs paid

   52      14       38  

Bell Aliant Free Cash Flow

   -      34       (34 )

Free Cash Flow

   231      262       (31 )

Bell Aliant free cash flow, excluding dividends paid

   -      (34 )     34  

Acquisition costs paid

   (52 )    (14 )     (38 )

Business dispositions

   -      538       (538 )

Spectrum payment

   (100 )    (113 )     13  

Other investing activities

   5      (5 )     10  

Increase in notes payable and bank advances

   691      601       90  

Issue of long-term debt

   502      33       469  

Repayment of long-term debt

   (146 )    (415 )     269  

Cash dividends paid on common shares

   (519 )    (452 )     (67 )

Issue of common shares

   38      32       6  

Other financing activities

   (91 )    (48 )     (43 )

 

  328      123       205  

Net increase in cash and cash equivalents

   559      385       174  

Cash and cash equivalents at beginning of period

   566      335       231  

Cash and cash equivalents at end of period

   1,125      720       405  

 

                    

Other information

                     

Free cash flow per share (3)

 $ 0.27   $ 0.34     $ (0.07 )

Annualized cash flow yield (5)

   6.0 %    7.0 %     (1.0 ) pts

 

                    

 

BCE Supplementary Financial Information - First Quarter 2015 Page 12

 

BCE
Consolidated Cash Flow Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)   Q1 15       TOTAL
2014		       Q4 14     Q3 14     Q2 14     Q1 14  

Net earnings

 

583

 

 

 

2,718

 

 

 

594

 

 

703

 

 

707

 

 

714

 

Adjustments to reconcile net earnings to cash flows from operating activities

                                        

Severance, acquisition and other costs

   224       216       58     66     54     38  

Depreciation and amortization

   839       3,452       852     855     879     866  

Post-employment benefit plans cost

   103       377       93     91     94     99  

Net interest expense

   223       921       236     225     226     234  

Losses (gains) on investments

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

Income taxes

   175       929       221     241     236     231  

Contributions to post-employment benefit plans

   (81 )     (683 )     (428 )   (82 )   (85 )   (88 )

Payments under other post-employment benefit plans

   (20 )     (73 )     (19 )   (18 )   (18 )   (18 )

Severance and other costs paid

   (49 )     (190 )     (44 )   (40 )   (38 )   (68 )

Acquisition costs paid

   (52 )     (131 )     (68 )   (33 )   (16 )   (14 )

Interest paid

   (227 )     (907 )     (233 )   (214 )   (231 )   (229 )

Income taxes paid (net of refunds)

   (333 )     (743 )     (180 )   (92 )   (110 )   (361 )

Net change in operating assets and liabilities

   (342 )     365       439     180     156     (410 )

Cash flows from operating activities

   1,045       6,241       1,527     1,882     1,850     982  

Bell Aliant dividends paid to BCE

   -       95       -     47     48     -  

Capital expenditures

   (827 )     (3,717 )     (1,076 )   (975 )   (937 )   (729 )

Cash dividends paid on preferred shares

   (39 )     (134 )     (40 )   (31 )   (31 )   (32 )

Cash dividends paid by subsidiaries to non-controlling interest

   -       (145 )     (1 )   (69 )   (68 )   (7 )

Acquisition costs paid

   52       131       68     33     16     14  

Voluntary defined benefit pension plan contribution

   -       350       350     -     -     -  

Bell Aliant Free Cash Flow

   -       (77 )     5     (53 )   (63 )   34  

Free Cash Flow

   231       2,744       833     834     815     262  

Bell Aliant free cash flow, excluding dividends paid

   -       (18 )     (5 )   6     15     (34 )

Business acquisitions

   -       (18 )     (8 )   (10 )   -     -  

Acquisition costs paid

   (52 )     (131 )     (68 )   (33 )   (16 )   (14 )

Voluntary defined benefit pension plan contribution

   -       (350 )     (350 )   -     -     -  

Business dispositions

   -       720       (4 )   186     -     538  

Spectrum payment

   (100 )     (566 )     -     -     (453 )   (113 )

Other investing activities

   5       11       13     1     2     (5 )

Increase (decrease) in notes payable and bank advances

   691       469       (132 )   443     (443 )   601  

Issue of long-term debt

   502       1,428       2     1,243     150     33  

Repayment of long-term debt

   (146 )     (1,113 )     (445 )   (117 )   (136 )   (415 )

Early debt redemption costs

   -       (4 )     (4 )   -     -     -  

Cash dividends paid on common shares

   (519 )     (1,893 )     (481 )   (480 )   (480 )   (452 )

Privatization of Bell Aliant

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

Issue of common shares

   38       49       6     2     9     32  

Other financing activities

   (91 )     (108 )     (12 )   (15 )   (33 )   (48 )

 

  328       (2,513 )     (1,673 )   422     (1,385 )   123  

Net increase (decrease) in cash and cash equivalents

   559       231       (840 )   1,256     (570 )   385  

Cash and cash equivalents at beginning of period

   566       335       1,406     150     720     335  

Cash and cash equivalents at end of period

   1,125       566       566     1,406     150     720  

 

                                        

Other information

                                        

Free cash flow per share

 $ 0.27     $ 3.46     $ 1.01   $ 1.06   $ 1.05   $ 0.34  

Annualized cash flow yield

   6.0 %     6.1 %     6.1 %   6.5 %   6.6 %   7.0 %

 

BCE Supplementary Financial Information - First Quarter 2015 Page 13

 

Accompanying Notes

  Beginning January 1, 2015, we report our results of operations in three segments: Bell Wireless, Bell Wireline and Bell Media. 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; and Bell Aliant means, as the context may require, until December 31, 2014, either Bell Aliant Inc. or, collectively, Bell Aliant Inc. and its subsidiaries and associates, or, after December 31, 2014, either Bell Aliant Regional Communications Inc. or, collectively, Bell Aliant Regional Communications Inc. and 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. Beginning January 1, 2015, the results of operation of our former Bell Aliant segment are included within our Bell Wireless and Bell Wireline segments, with prior periods restated for comparative purposes.
 
(3) Non-GAAP Financial Measures
 
  Adjusted EBITDA and Adjusted EBITDA margin

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 - First Quarter 2015 Page 14

 

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.

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 - First Quarter 2015 Page 15

 

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

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

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 - First Quarter 2015 Page 16