EX-99.2 3 supp_q415.htm SUPPLEMENTARY FINANCIAL INFORMATION - FOURTH QUARTER 2015 BCE Inc. Supplementary Financial Information – Fourth Quarter 2015

Exhibit 99.2

 

 

BCE (1)
Consolidated Operational Data (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)   Q4
2015		     Q4
2014		       $ change   % change       TOTAL
2015		     TOTAL
2014		       $ change   % change  

Operating revenues

   5,603     5,528       75   1.4 %     21,514     21,042       472   2.2 %

Operating costs (A)

   (3,462 )   (3,438 )     (24 ) (0.7 %)     (12,682 )   (12,463 )     (219 ) (1.8 %)

Post-employment benefit plans service cost

   (68 )   (68 )     -   -       (281 )   (276 )     (5 ) (1.8 %)

Adjusted EBITDA (3)

   2,073     2,022       51   2.5 %     8,551     8,303       248   3.0 %

Adjusted EBITDA margin (3)

   37.0 %   36.6 %         0.4 pts     39.7 %   39.5 %         0.2 pts

Severance, acquisition and other costs

   (152 )   (58 )     (94 ) n.m.       (446 )   (216 )     (230 ) n.m.  

Depreciation

   (731 )   (734 )     3   0.4 %     (2,890 )   (2,880 )     (10 ) (0.3 %)

Amortization

   (136 )   (118 )     (18 ) (15.3 %)     (530 )   (572 )     42   7.3 %

Finance costs

                                                  

Interest expense

   (226 )   (238 )     12   5.0 %     (909 )   (929 )     20   2.2 %

Interest on post-employment benefit obligations

   (28 )   (25 )     (3 ) (12.0 %)     (110 )   (101 )     (9 ) (8.9 %)

Other (expense) income

   (70 )   (34 )     (36 ) n.m.       (12 )   42       (54 ) n.m.  

Income taxes

   (188 )   (221 )     33   14.9 %     (924 )   (929 )     5   0.5 %

Net earnings

   542     594       (52 ) (8.8 %)     2,730     2,718       12   0.4 %

Net earnings attributable to:

                                                  

Common shareholders

   496     542       (46 ) (8.5 %)     2,526     2,363       163   6.9 %

Preferred shareholders

   37     40       (3 ) (7.5 %)     152     137       15   10.9 %

Non-controlling interest

   9     12       (3 ) (25.0 %)     52     218       (166 ) (76.1 %)

Net earnings

   542     594       (52 ) (8.8 %)     2,730     2,718       12   0.4 %

Net earnings per common share - basic

 $

0.58

 

$

0.64

 

 

$

(0.06

)

(9.4

%)

 

$

2.98

 

$

2.98

 

 

$

-

 

-

 

Net earnings per common share - diluted

  $ 0.58   $ 0.63     $ (0.05 ) (7.9 %)   $ 2.98   $ 2.97     $ 0.01   0.3 %

Dividends per common share

 $

0.6500

 

$

0.6175

 

 

$

0.0325

 

5.3

%

 

$

2.6000

 

$

2.4700

 

 

$

0.130

 

5.3

%

Average number of common shares outstanding - basic (millions)

 

853.5

 

 

837.7

 

 

 

 

 

 

 

 

 

847.1

 

 

793.7

 

 

 

 

 

 

 

Average number of common shares outstanding - diluted (millions)

   854.9     838.9                   848.3     794.6              

Number of common shares outstanding (millions)

   865.6     840.3                   865.6     840.3              

Adjusted Net Earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   496     542       (46 ) (8.5 %)     2,526     2,363       163   6.9 %

Severance, acquisition and other costs

   112     42       70   n.m.       327     148       179   n.m.  

Net losses (gains) on investments

   1     8       (7 ) (87.5 %)     (21 )   (8 )     (13 ) n.m.  

Early debt redemption costs

   6     18       (12 ) (66.7 %)     13     21       (8 ) (38.1 %)

Adjusted net earnings (3)

   615     610       5   0.8 %     2,845     2,524       321   12.7 %

Impact on net earnings per share

  $ 0.14   $ 0.08     $ 0.06   75.0 %   $ 0.38   $ 0.20     $ 0.18   90.0 %

Adjusted EPS (3)

 $

0.72

 

$

0.72

 

 

$

-

 

-

 

 

$

3.36

 

$

3.18

 

 

$

0.18

 

5.7

%

 

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

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 2

BCE
Consolidated Operational Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)   TOTAL
2015		       Q4 15     Q3 15     Q2 15     Q1 15       TOTAL
2014		       Q4 14     Q3 14     Q2 14     Q1 14  

Operating revenues

   21,514       5,603     5,345     5,326     5,240       21,042       5,528     5,195     5,220     5,099  

Operating costs (A)

   (12,682 )     (3,462 )   (3,089 )   (3,061 )   (3,070 )     (12,463 )     (3,438 )   (3,014 )   (3,008 )   (3,003 )

Post-employment benefit plans service cost

   (281 )     (68 )   (69 )   (68 )   (76 )     (276 )     (68 )   (66 )   (68 )   (74 )

Adjusted EBITDA

   8,551       2,073     2,187     2,197     2,094       8,303       2,022     2,115     2,144     2,022  

Adjusted EBITDA margin

   39.7 %     37.0 %   40.9 %   41.3 %   40.0 %     39.5 %     36.6 %   40.7 %   41.1 %   39.7 %

Severance, acquisition and other costs

   (446 )     (152 )   (46 )   (24 )   (224 )     (216 )     (58 )   (66 )   (54 )   (38 )

Depreciation

   (2,890 )     (731 )   (727 )   (720 )   (712 )     (2,880 )     (734 )   (739 )   (708 )   (699 )

Amortization

   (530 )     (136 )   (133 )   (134 )   (127 )     (572 )     (118 )   (116 )   (171 )   (167 )

Finance costs

                                                                  

Interest expense

   (909 )     (226 )   (227 )   (230 )   (226 )     (929 )     (238 )   (227 )   (229 )   (235 )

Interest on post-employment benefit obligations

   (110 )     (28 )   (27 )   (28 )   (27 )     (101 )     (25 )   (25 )   (26 )   (25 )

Other (expense) income

   (12 )     (70 )   35     43     (20 )     42       (34 )   2     (13 )   87  

Income taxes

   (924 )     (188 )   (271 )   (290 )   (175 )     (929 )     (221 )   (241 )   (236 )   (231 )

Net earnings

   2,730       542     791     814     583       2,718       594     703     707     714  

Net earnings attributable to:

                                                                  

Common shareholders

   2,526       496     739     759     532       2,363       542     600     606     615  

Preferred shareholders

   152       37     38     39     38       137       40     31     33     33  

Non-controlling interest

   52       9     14     16     13       218       12     72     68     66  

Net earnings

   2,730       542     791     814     583       2,718       594     703     707     714  

Net earnings per common share - basic

$

2.98

 

 

$

0.58

 

$

0.87

 

$

0.90

 

$

0.63

 

 

$

2.98

 

 

$

0.64

 

$

0.77

 

$

0.78

 

$

0.79

 

Net earnings per common share - diluted

 $ 2.98     $ 0.58   $ 0.87   $ 0.90   $ 0.63     $ 2.97     $ 0.63   $ 0.77   $ 0.78   $ 0.79  

Dividends per common share

$

2.6000

 

 

$

0.6500

 

$

0.6500

 

$

0.6500

 

$

0.6500

 

 

$

2.4700

 

 

$

0.6175

 

$

0.6175

 

$

0.6175

 

$

0.6175

 

Average number of common shares outstanding - basic (millions)

   847.1       853.5     848.9     844.9     841.0       793.7       837.7     782.1     777.7     776.5  

Average number of common shares outstanding - diluted (millions)

   848.3       854.9     850.1     846.2     842.6       794.6       838.9     783.0     778.6     777.2  

Number of common shares outstanding (millions)

   865.6       865.6     849.4     848.6     841.9       840.3       840.3     828.3     778.1     777.3  

Adjusted Net Earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   2,526       496     739     759     532       2,363       542     600     606     615  

Severance, acquisition and other costs

   327       112     35     16     164       148       42     45     38     23  

Net (gains) losses on investments

   (21 )     1     16     (40 )   2       (8 )     8     -     (4 )   (12 )

Early debt redemption costs

   13       6     -     -     7       21       18     3     -     -  

Adjusted net earnings

   2,845       615     790     735     705       2,524       610     648     640     626  

Impact on net earnings per share

 $ 0.38     $ 0.14   $ 0.06   $ (0.03 ) $ 0.21     $ 0.20     $ 0.08   $ 0.06   $ 0.04   $ 0.02  

Adjusted EPS

$

3.36

 

 

$

0.72

 

$

0.93

 

$

0.87

 

$

0.84

 

 

$

3.18

 

 

$

0.72

 

$

0.83

 

$

0.82

 

$

0.81

 

 

(A) Excludes post-employment benefit plans service cost

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 3

BCE
Segmented Data (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q4
2015		   Q4
2014		     $ change  

% change

     TOTAL
2015		   TOTAL
2014		     $ change  

% change

  

 

                                     

Revenues

                                      

Bell Wireless

 1,770   1,671     99   5.9 %   6,876   6,327     549   8.7 %

Bell Wireline

 3,161   3,210     (49 ) (1.5 %)   12,258   12,324     (66 ) (0.5 %)

Bell Media

 816   789     27   3.4 %   2,974   2,937     37   1.3 %

Inter-segment eliminations

 (144 ) (142 )   (2 ) (1.4 %)   (594 ) (546 )   (48 ) (8.8 %)

Total

 5,603   5,528     75   1.4 %   21,514   21,042     472   2.2 %

 

                                     

Operating costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 (1,129 ) (1,071 )   (58 ) (5.4 %)   (4,048 ) (3,703 )   (345 ) (9.3 %)

Bell Wireline

 (1,913 ) (1,980 )   67   3.4 %   (7,258 ) (7,379 )   121   1.6 %

Bell Media

 (632 ) (597 )   (35 ) (5.9 %)   (2,251 ) (2,203 )   (48 ) (2.2 %)

Inter-segment eliminations

 144   142     2   1.4 %   594   546     48   8.8 %

Total

 (3,530 ) (3,506 )   (24 ) (0.7 %)   (12,963 ) (12,739 )   (224 ) (1.8 %)

 

                                     

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 641   600     41   6.8 %   2,828   2,624     204   7.8 %

Margin

 36.2 % 35.9 %       0.3  pts   41.1 % 41.5 %       (0.4 ) pts

Bell Wireline

 1,248   1,230     18   1.5 %   5,000   4,945     55   1.1 %

Margin

 39.5 % 38.3 %       1.2  pts   40.8 % 40.1 %       0.7  pts

Bell Media

 184   192     (8 ) (4.2 %)   723   734     (11 ) (1.5 %)

Margin

 22.5 % 24.3 %       (1.8 ) pts   24.3 % 25.0 %       (0.7 ) pts

Total

 2,073   2,022     51   2.5 %   8,551   8,303     248   3.0 %

Margin

 37.0 % 36.6 %       0.4  pts   39.7 % 39.5 %       0.2  pts

 

                                     

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 193   218     25   11.5 %   716   687     (29 ) (4.2 %)

Capital Intensity (4)

 10.9 % 13.0 %       2.1  pts   10.4 % 10.9 %       0.5  pts

Bell Wireline

 741   804     63   7.8 %   2,809   2,893     84   2.9 %

Capital Intensity

 23.4 % 25.0 %       1.6  pts   22.9 % 23.5 %       0.6  pts

Bell Media

 24   54     30   55.6 %   101   137     36   26.3 %

Capital Intensity

 2.9 % 6.8 %       3.9  pts   3.4 % 4.7 %       1.3  pts

Total

 958   1,076     118   11.0 %   3,626   3,717     91   2.4 %

Capital Intensity

 17.1 % 19.5 %       2.4  pts   16.9 % 17.7 %       0.8  pts
                                        

 

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 4

BCE
Segmented Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) TOTAL
2015		     Q4 15   Q3 15   Q2 15   Q1 15     Total
2014		     Q4 14   Q3 14   Q2 14   Q1 14  

 

                                             

Revenues

                                              

Bell Wireless

 6,876     1,770   1,772   1,697   1,637     6,327     1,671   1,621   1,543   1,492  

Bell Wireline

 12,258     3,161   3,028   3,042   3,027     12,324     3,210   3,046   3,049   3,019  

Bell Media

 2,974     816   692   740   726     2,937     789   665   761   722  

Inter-segment eliminations

 (594 )   (144 ) (147 ) (153 ) (150 )   (546 )   (142 ) (137 ) (133 ) (134 )

Total

 21,514     5,603   5,345   5,326   5,240     21,042     5,528   5,195   5,220   5,099  

 

                                             

Operating costs

                                              

Bell Wireless

 (4,048 )   (1,129 ) (1,014 ) (980 ) (925 )   (3,703 )   (1,071 ) (921 ) (862 ) (849 )

Bell Wireline

 (7,258 )   (1,913 ) (1,782 ) (1,777 ) (1,786 )   (7,379 )   (1,980 ) (1,813 ) (1,796 ) (1,790 )

Bell Media

 (2,251 )   (632 ) (509 ) (525 ) (585 )   (2,203 )   (597 ) (483 ) (551 ) (572 )

Inter-segment eliminations

 594     144   147   153   150     546     142   137   133   134  

Total

 (12,963 )   (3,530 ) (3,158 ) (3,129 ) (3,146 )   (12,739 )   (3,506 ) (3,080 ) (3,076 ) (3,077 )

 

                                             

Adjusted EBITDA

                                              

Bell Wireless

 2,828     641   758   717   712     2,624     600   700   681   643  

Margin

 41.1 %   36.2 % 42.8 % 42.3 % 43.5 %   41.5 %   35.9 % 43.2 % 44.1 % 43.1 %

Bell Wireline

 5,000     1,248   1,246   1,265   1,241     4,945     1,230   1,233   1,253   1,229  

Margin

 40.8 %   39.5 % 41.1 % 41.6 % 41.0 %   40.1 %   38.3 % 40.5 % 41.1 % 40.7 %

Bell Media

 723     184   183   215   141     734     192   182   210   150  

Margin

 24.3 %   22.5 % 26.4 % 29.1 % 19.4 %   25.0 %   24.3 % 27.4 % 27.6 % 20.8 %

Total

 8,551     2,073   2,187   2,197   2,094     8,303     2,022   2,115   2,144   2,022  

Margin

 39.7 %   37.0 % 40.9 % 41.3 % 40.0 %   39.5 %   36.6 % 40.7 % 41.1 % 39.7 %

 

                                             

Capital expenditures

                                              

Bell Wireless

 716     193   184   188   151     687     218   182   168   119  

Capital Intensity

 10.4 %   10.9 % 10.4 % 11.1 % 9.2 %   10.9 %   13.0 % 11.2 % 10.9 % 8.0 %

Bell Wireline

 2,809     741   716   696   656     2,893     804   756   737   596  

Capital Intensity

 22.9 %   23.4 % 23.6 % 22.9 % 21.7 %   23.5 %   25.0 % 24.8 % 24.2 % 19.7 %

Bell Media

 101     24   27   30   20     137     54   37   32   14  

Capital Intensity

 3.4 %   2.9 % 3.9 % 4.1 % 2.8 %   4.7 %   6.8 % 5.6 % 4.2 % 1.9 %

Total

 3,626     958   927   914   827     3,717     1,076   975   937   729  

Capital Intensity

 16.9 %   17.1 % 17.3 % 17.2 % 15.8 %   17.7 %   19.5 % 18.8 % 18.0 % 14.3 %

 

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 5

Bell Wireless (1) (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q4
2015		   Q4
2014		    

% change

     TOTAL
2015		   TOTAL
2014		    

% change

  

Bell Wireless

                              

Revenues

                              

Service

 1,588   1,494     6.3 %   6,246   5,806     7.6 %

Product

 171   167     2.4 %   590   483     22.2 %

Total external Bell Wireless revenues

 1,759   1,661     5.9 %   6,836   6,289     8.7 %

Inter-segment

 11   10     10.0 %   40   38     5.3 %

Total Bell Wireless operating revenues

 1,770   1,671     5.9 %    6,876   6,327     8.7 %

Operating costs

   (1,129 ) (1,071 )   (5.4 %)     (4,048 ) (3,703 )   (9.3 %)

Adjusted EBITDA

 641   600     6.8 %   2,828   2,624     7.8 %

Adjusted EBITDA margin (Total revenues)

 36.2 % 35.9 %   0.3  pts   41.1 % 41.5 %   (0.4 ) pts

Adjusted EBITDA margin (Service revenues)

 40.4 % 40.2 %   0.2  pts   45.3 % 45.2 %   0.1  pts

Capital expenditures

193

 

218

 

 

11.5

%

 

716

 

687

 

 

(4.2

%)

Capital intensity

 10.9 % 13.0 %   2.1  pts   10.4 % 10.9 %   0.5  pts

Wireless gross activations

  449,650   462,285     (2.7 %)       1,600,147   1,643,451     (2.6 %)

Postpaid

  387,696   382,455     1.4 %      1,338,141   1,291,207     3.6 %

Wireless net activations

 62,464   83,498     (25.2 %)      127,203   193,596     (34.3 %)

Postpaid

 91,308   118,120     (22.7 %)     265,369   311,954     (14.9 %)

Wireless subscribers end of period (EOP)

  8,245,831    8,118,628     1.6 %    8,245,831    8,118,628     1.6 %

Postpaid

  7,375,416    7,110,047     3.7 %    7,375,416    7,110,047     3.7 %

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

  63.67   60.97     4.4 %   63.09   59.92     5.3 %

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

  1.57 % 1.57 %   -  pts    1.51 % 1.52 %   0.01  pts

Prepaid

  3.19 % 3.43 %   0.24  pts   3.32 % 3.44 %   0.12  pts

Postpaid

  1.38 % 1.29 %   (0.09 ) pts   1.28 % 1.22 %   (0.06 ) pts

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

  525   495     (6.1 %)   467   441     (5.9 %)
                               

 

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 6

Bell Wireless - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) TOTAL
2015		     Q4 15   Q3 15   Q2 15   Q1 15     TOTAL
2014		     Q4 14   Q3 14   Q2 14   Q1 14  

Bell Wireless

                                              

Revenues

                                              

Service

 6,246     1,588   1,619   1,539   1,500     5,806     1,494   1,495   1,429   1,388  

Product

 590     171   143   149   127     483     167   117   105   94  

Total external Bell Wireless revenues

 6,836     1,759   1,762   1,688   1,627     6,289     1,661   1,612   1,534   1,482  

Inter-segment

 40     11   10   9   10     38     10   9   9   10  

Total Bell Wireless operating revenues

 6,876     1,770   1,772   1,697   1,637     6,327     1,671   1,621   1,543   1,492  

Operating costs

 (4,048 )   (1,129 ) (1,014 ) (980 ) (925 )   (3,703 )   (1,071 ) (921 ) (862 ) (849 )

Adjusted EBITDA

 2,828     641   758   717   712     2,624     600   700   681   643  

Adjusted EBITDA margin (Total revenues)

 41.1 %   36.2 % 42.8 % 42.3 % 43.5 %   41.5 %   35.9 % 43.2 % 44.1 % 43.1 %

Adjusted EBITDA margin (Service revenues)

 45.3 %   40.4 % 46.8 % 46.6 % 47.5 %   45.2 %   40.2 % 46.8 % 47.7 % 46.3 %
                                               

Capital expenditures

 716     193   184   188   151     687     218   182   168   119  

Capital intensity

 10.4 %   10.9 % 10.4 % 11.1 % 9.2 %   10.9 %   13.0 % 11.2 % 10.9 % 8.0 %

Wireless gross activations

 1,600,147     449,650   424,164   384,973   341,360     1,643,451     462,285   431,460   391,382   358,324  

Postpaid

 1,338,141     387,696   353,652   317,809   278,984     1,291,207     382,455   331,851   297,374   279,527  

Wireless net activations

 127,203     62,464   58,543   22,110   (15,914 )   193,596     83,498   83,636   42,898   (16,436 )

Postpaid

 265,369     91,308   77,655   61,033   35,373     311,954     118,120   91,779   67,951   34,104  

Wireless subscribers EOP

 8,245,831     8,245,831   8,183,367   8,124,824   8,102,714     8,118,628     8,118,628   8,035,130   7,951,494   7,908,596  

Postpaid

 7,375,416     7,375,416   7,284,108   7,206,453   7,145,420     7,110,047     7,110,047   6,991,927   6,900,148   6,832,197  

ARPU ($/month)

 63.09     63.67   65.34   62.48   60.83     59.92     60.97   61.59   59.35   57.75  

Churn (%)(average per month)

 1.51 %   1.57 % 1.49 % 1.49 % 1.47 %   1.52 %   1.57 % 1.45 % 1.47 % 1.58 %

Prepaid

 3.32 %   3.19 % 2.98 % 3.48 % 3.60 %   3.44 %   3.43 % 3.14 % 3.49 % 3.68 %

Postpaid

 1.28 %   1.38 % 1.31 % 1.23 % 1.18 %   1.22 %   1.29 % 1.20 % 1.15 % 1.24 %

COA ($/subscriber)

 467     525   446   434   452     441     495   420   403   439  

 

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 7

Bell Wireline (1) (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q4
2015		   Q4
2014		    

% change

     TOTAL
2015		   TOTAL
2014		    

% change

  

Bell Wireline

                              

Data

 1,862   1,833     1.6 %   7,163   6,978     2.7 %

Local & access

 802   838     (4.3 %)   3,271   3,420     (4.4 %)

Long distance

 204   234     (12.8 %)   831   922     (9.9 %)

Equipment & other

 250   248     0.8 %   778   791     (1.6 %)

Total external revenues

 3,118   3,153     (1.1 %)   12,043   12,111     (0.6 %)

Inter-segment revenues

 43   57     (24.6 %)   215   213     0.9 %

Total Bell Wireline operating revenues

 3,161   3,210     (1.5 %)   12,258   12,324     (0.5 %)

Operating costs

 (1,913 ) (1,980 )   3.4 %   (7,258 ) (7,379 )   1.6 %

Adjusted EBITDA

 1,248   1,230     1.5 %   5,000   4,945     1.1 %

Adjusted EBITDA Margin

 39.5 % 38.3 %   1.2  pts   40.8 % 40.1 %   0.7  pts

 

                             

Capital expenditures

 741   804     7.8 %   2,809   2,893     2.9 %

Capital intensity

 23.4 % 25.0 %   1.6  pts   22.9 % 23.5 %   0.6  pts

High-speed Internet

                              

High-speed Internet net activations

 38,908   52,010     (25.2 %)   155,052   160,390     (3.3 %)

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

  3,413,147    3,297,026     3.5 %    3,413,147    3,297,026     3.5 %

TV

                              

Net subscriber activations

 37,786   42,190     (10.4 %)   107,380   153,360     (30.0 %)

Internet Protocol Television (IPTV)

 74,092   76,074     (2.6 %)   253,329   276,034     (8.2 %)

Total subscribers EOP (A) (B)

  2,738,496    2,642,608     3.6 %    2,738,496    2,642,608     3.6 %

IPTV (A) (B)

  1,182,791   933,547     26.7 %    1,182,791   933,547     26.7 %

Local

                              

Network Access Services (NAS)

                              

Residential (A) (B)

  3,533,732    3,815,608     (7.4 %)    3,533,732    3,815,608     (7.4 %)

Business

  3,154,934    3,315,244     (4.8 %)    3,154,934    3,315,244     (4.8 %)

Total (A) (B)

  6,688,666    7,130,852     (6.2 %)    6,688,666    7,130,852     (6.2 %)

NAS net losses

                              

Residential

 (58,081 ) (57,232 )   (1.5 %)   (278,124 ) (305,729 )   9.0 %

Business

 (48,829 ) (35,773 )   (36.5 %)   (160,310 ) (158,988 )   (0.8 %)

Total

 (106,910 ) (93,005 )   (15.0 %)   (438,434 ) (464,717 )   5.7 %

 

(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 - Fourth Quarter 2015 Page 8

Bell Wireline - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) TOTAL
2015		     Q4 15   Q3 15   Q2 15   Q1 15     TOTAL
2014		     Q4 14   Q3 14   Q2 14   Q1 14  

Bell Wireline

                                              

Data

 7,163     1,862   1,770   1,774   1,757     6,978     1,833   1,722   1,725   1,698  

Local & access

 3,271     802   818   827   824     3,420     838   855   860   867  

Long distance

 831     204   207   207   213     922     234   229   233   226  

Equipment & other

 778     250   181   174   173     791     248   186   179   178  

Total external revenues

 12,043     3,118   2,976   2,982   2,967     12,111     3,153   2,992   2,997   2,969  

Inter-segment revenues

 215     43   52   60   60     213     57   54   52   50  

Total Bell Wireline operating revenues

 12,258     3,161   3,028   3,042   3,027     12,324     3,210   3,046   3,049   3,019  

Operating costs

 (7,258 )   (1,913 ) (1,782 ) (1,777 ) (1,786 )   (7,379 )   (1,980 ) (1,813 ) (1,796 ) (1,790 )

Adjusted EBITDA

 5,000     1,248   1,246   1,265   1,241     4,945     1,230   1,233   1,253   1,229  

Adjusted EBITDA Margin

 40.8 %   39.5 % 41.1 % 41.6 % 41.0 %   40.1 %   38.3 % 40.5 % 41.1 % 40.7 %

 

                                             

Capital expenditures

 2,809     741   716   696   656     2,893     804   756   737   596  

Capital intensity

 22.9 %   23.4 % 23.6 % 22.9 % 21.7 %   23.5 %   25.0 % 24.8 % 24.2 % 19.7 %

High-speed Internet

                                              

High-speed Internet net activations

 155,052     38,908   57,888   18,606   39,650     160,390     52,010   64,254   17,544   26,582  

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

 3,413,147     3,413,147   3,374,239   3,316,351   3,297,745     3,297,026     3,297,026   3,245,016   3,180,762   3,163,218  

TV

                                              

Net subscriber activations

 107,380     37,786   25,914   16,690   26,990     153,360     42,190   37,578   33,369   40,223  

IPTV

 253,329     74,092   67,908   50,466   60,863     276,034     76,074   74,450   59,132   66,378  

Total subscribers EOP (A) (B)

 2,738,496     2,738,496   2,700,710   2,674,796   2,658,106     2,642,608     2,642,608   2,600,418   2,562,840   2,529,471  

IPTV (A) (B)

 1,182,791     1,182,791   1,108,699   1,040,791   990,325     933,547     933,547   857,473   783,023   723,891  

Local

                                              

NAS

                                              

Residential (A) (B)

 3,533,732     3,533,732   3,591,813   3,670,167   3,745,986     3,815,608     3,815,608   3,872,840   3,943,622   4,031,682  

Business

 3,154,934     3,154,934   3,203,763   3,233,485   3,271,175     3,315,244     3,315,244   3,351,017   3,388,287   3,431,147  

Total (A) (B)

 6,688,666     6,688,666   6,795,576   6,903,652   7,017,161     7,130,852     7,130,852   7,223,857   7,331,909   7,462,829  

NAS net losses

                                              

Residential

 (278,124 )   (58,081 ) (78,354 ) (75,819 ) (65,870 )   (305,729 )   (57,232 ) (70,782 ) (88,060 ) (89,655 )

Business

 (160,310 )   (48,829 ) (29,722 ) (37,690 ) (44,069 )   (158,988 )   (35,773 ) (37,270 ) (42,860 ) (43,085 )

Total

 (438,434 )   (106,910 ) (108,076 ) (113,509 ) (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 - Fourth Quarter 2015 Page 9

BCE
Net debt and other information (2)

BCE - Net debt and preferred shares                    
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)                    

 

December 31   September 30   June 30   March 31   December 31  

 

2015   2015   2015   2015   2014  

Debt due within one year

 4,895   6,416   5,058   4,712   3,743  

Long-term debt

 15,390   14,444   15,443   16,612   16,355  

Preferred shares - BCE (A)

 2,002   2,002   2,002   2,002   2,002  

Cash and cash equivalents

 (613 ) (622 ) (169 ) (1,125 ) (566 )

Net Debt (3)

 21,674   22,240   22,334   22,201   21,534  

 

                   

Net Debt Leverage Ratio (3)

 2.53   2.62   2.65   2.65   2.59  

Adjusted EBITDA /Net interest expense, as shown in our statements of cash flows and 50% of declared preferred share dividends as shown in our income statements (3)

 8.76   8.58   8.53   8.52   8.38  

 

                     

 

Bell Media Inc. - Proportionate Information                                            
(In millions of Canadian dollars, except where otherwise indicated) (unaudited) TOTAL
2015		   Q4
2015		   Q3
2015		   Q2
2015		   Q1
2015		     Total
2014		     Q4
2014		   Q3
2014		   Q2
2014		   Q1
2014		  

 

                                           

Proportionate Net Debt

 -   -   -   -   -     -     -   -   14   30  

Proportionate Adjusted EBITDA

 643   170   161   191   121     657     181   158   189   129  
                                             

 

Cash Flow Information                                  
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)  Q4
2015		   Q4
2014		   $ change   % change     TOTAL
2015		   TOTAL
2014		   $ change   % change  

Free Cash Flow (FCF) (3)

                                  

Cash from operating activities, excluding acquisition and other costs paid

 1,669   1,559   110   7.1 %   6,566   5,680   886   15.6 %

Capital expenditures

 (958 ) (1,035 ) 77   7.4 %   (3,626 ) (3,245 ) (381 ) (11.7 %)

Dividends paid on preferred shares

 (37 ) (40 ) 3   7.5 %   (150 ) (134 ) (16 ) (11.9 %)

Dividends paid by subsidiaries to non-controlling interest

 (8 ) (1 ) (7 ) n.m.     (41 ) (2 ) (39 ) n.m.  

Voluntary defined benefit pension plan contribution

 250   350   (100 ) (28.6 %)   250   350   (100 ) (28.6 %)

Bell Aliant dividends to BCE

 -   -   -   -     -   95   (95 ) (100.0 %)

FCF

 916   833   83   10.0 %   2,999   2,744   255   9.3 %
                                   

 

Cash Flow Information - Historical Trend                                          
(In millions of Canadian dollars, except where otherwise indicated) (unaudited) TOTAL
2015		   Q4
2015		   Q3
2015		   Q2
2015		   Q1
2015		     Total
2014		   Q4
2014		   Q 3
2014		   Q2
2014		   Q1
2014		  

FCF

                                          

Cash from operating activities, excluding acquisition and other costs paid

 6,566   1,669   1,911   1,889   1,097     5,680   1,559   1,644   1,589   888  

Capital expenditures

 (3,626 ) (958 ) (927 ) (914 ) (827 )   (3,245 ) (1,035 ) (825 ) (791 ) (594 )

Dividends paid on preferred shares

 (150 ) (37 ) (37 ) (37 ) (39 )   (134 ) (40 ) (31 ) (31 ) (32 )

Dividends paid by subsidiaries to non-controlling interest

 (41 ) (8 ) (26 ) (7 ) -     (2 ) (1 ) (1 ) -   -  

Voluntary defined benefit pension plan contribution

 250   250   -   -   -     350   350   -   -   -  

Bell Aliant dividends to BCE

 -   -   -   -   -     95   -   47   48   -  

FCF

 2,999   916   921   931   231     2,744   833   834   815   262  
                                           

 

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

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 10

BCE
Consolidated Statements of Financial Position (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) December 31
2015		     September 30
2015		     June 30
2015		     March 31
2015		     December 31
2014		  

ASSETS

                            

Current assets

                            

Cash

 100     84     131     127     142  

Cash equivalents

 513     538     38     998     424  

Trade and other receivables

 3,009     2,766     2,758     2,781     3,069  

Inventory

 416     450     405     403     333  

Prepaid expenses

 393     452     528     522     379  

Other current assets

 377     287     232     249     201  

Total current assets

 4,808     4,577     4,092     5,080     4,548  

Non-current assets

                            

Property, plant and equipment

 21,630     21,709     21,513     21,347     21,327  

Intangible assets

 11,176     10,977     10,886     10,332     10,224  

Deferred tax assets

 89     93     131     162     162  

Investments in associates and joint ventures

 1,119     1,125     1,088     790     776  

Other non-current assets

 794     810     833     989     875  

Goodwill

 8,377     8,377     8,376     8,376     8,385  

Total non-current assets

 43,185     43,091     42,827     41,996     41,749  

Total assets

 47,993     47,668     46,919     47,076     46,297  

LIABILITIES

                            

Current liabilities

                            

Trade payables and other liabilities

 4,287     4,015     4,053     4,007     4,398  

Interest payable

 148     148     141     143     145  

Dividends payable

 576     566     565     561     534  

Current tax liabilities

 86     158     157     74     269  

Debt due within one year

 4,895     6,416     5,058     4,712     3,743  

Total current liabilities

 9,992     11,303     9,974     9,497     9,089  

Non-current liabilities

                            

Long-term debt

 15,390     14,444     15,443     16,612     16,355  

Deferred tax liabilities

 1,824     1,717     1,559     1,352     1,321  

Post-employment benefit obligation

 2,038     2,296     2,101     2,803     2,772  

Other non-current liabilities

 1,420     1,423     1,462     1,493     1,521  

Total non-current liabilities

 20,672     19,880     20,565     22,260     21,969  

Total liabilities

 30,664     31,183     30,539     31,757     31,058  

 

                           

EQUITY

                            

Equity attributable to BCE shareholders

                            

Preferred shares

 4,004     4,004     4,004     4,004     4,004  

Common shares

 18,100     17,181     17,142     16,790     16,717  

Contributed surplus

 1,150     1,153     1,137     1,121     1,141  

Accumulated other comprehensive income

 119     105     87     124     97  

Deficit

 (6,350 )   (6,264 )   (6,306 )   (7,027 )   (7,013 )

Total Equity attributable to BCE shareholders

 17,023     16,179     16,064     15,012     14,946  

Non-controlling interest

 306     306     316     307     293  

Total equity

 17,329     16,485     16,380     15,319     15,239  

Total liabilities and equity

 47,993     47,668     46,919     47,076     46,297  

Number of common shares outstanding (millions)

 865.6     849.4     848.6     841.9     840.3  

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 11

BCE
Consolidated Cash Flow Data (2)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)   Q4
2015		     Q4
2014		       $ change       TOTAL
2015		     TOTAL
2014		       $ change  

Net earnings

   542     594       (52 )     2,730     2,718       12  

Adjustments to reconcile net earnings to cash flows from operating activities

                                          

Severance, acquisition and other costs

   152     58       94       446     216       230  

Depreciation and amortization

   867     852       15       3,420     3,452       (32 )

Post-employment benefit plans cost

   96     93       3       391     377       14  

Net interest expense

   223     236       (13 )     900     921       (21 )

Loss (gains) on investments

   1     6       (5 )     (72 )   (10 )     (62 )

Income taxes

   188     221       (33 )     924     929       (5 )

Contributions to post-employment benefit plans

   (317 )   (428 )     111       (566 )   (683 )     117  

Payments under other post-employment benefit plans

   (19 )   (19 )     -       (75 )   (73 )     (2 )

Severance and other costs paid

   (44 )   (44 )     -       (190 )   (190 )     -  

Interest paid

   (229 )   (233 )     4       (911 )   (907 )     (4 )

Income taxes paid (net of refunds)

   (154 )   (180 )     26       (672 )   (743 )     71  

Acquisition and other costs paid

   (159 )   (68 )     (91 )     (292 )   (131 )     (161 )

Net change in operating assets and liabilities

   363     439       (76 )     241     365       (124 )

Cash flows from operating activities

   1,510     1,527       (17 )     6,274     6,241       33  

Bell Aliant dividends paid to BCE

   -     -       -       -     95       (95 )

Capital expenditures

   (958 )   (1,076 )     118       (3,626 )   (3,717 )     91  

Cash dividends paid on preferred shares

   (37 )   (40 )     3       (150 )   (134 )     (16 )

Cash dividends paid by subsidiaries to non-controlling interest

   (8 )   (1 )     (7 )     (41 )   (145 )     104  

Acquisition and other costs paid

   159     68       91       292     131       161  

Voluntary defined benefit pension plan contribution

   250     350       (100 )     250     350       (100 )

Bell Aliant Free Cash Flow

   -     5       (5 )     -     (77 )     77  

Free Cash Flow

   916     833       83       2,999     2,744       255  

Bell Aliant free cash flow, excluding dividends paid

   -     (5 )     5       -     (18 )     18  

Business acquisitions

   (25 )   (8 )     (17 )     (311 )   (18 )     (293 )

Acquisition and other costs paid

   (159 )   (68 )     (91 )     (292 )   (131 )     (161 )

Voluntary defined benefit pension plan contribution

   (250 )   (350 )     100       (250 )   (350 )     100  

Business dispositions

   -     (4 )     4       409     720       (311 )

Acquisition of spectrum licences

   (1 )   -       (1 )     (535 )   (566 )     31  

Other investing activities

   (36 )   13       (49 )     (51 )   11       (62 )

(Decrease) increase in notes payable and bank advances

   (596 )   (132 )     (464 )     76     469       (393 )

Increase in securitized trade receivables

   -     -       -       10     -       10  

Issue of long-term debt

   996     2       994       1,498     1,428       70  

Repayment of long-term debt

   (1,107 )   (445 )     (662 )     (2,084 )   (1,113 )     (971 )

Privatization of Bell Aliant

   -     (185 )     185       -     (989 )     989  

Issue of common shares

   888     6       882       952     49       903  

Common shares issuance cost

   (35 )   -       (35 )     (35 )   -       (35 )

Repurchase of shares for settlement of share-based payments

   (41 )   (10 )     (31 )     (138 )   (83 )     (55 )

Cash dividends paid on common shares

   (552 )   (481 )     (71 )     (2,169 )   (1,893 )     (276 )

Other financing activities

   (7 )   (6 )     (1 )     (32 )   (29 )     (3 )

 

  (925 )   (1,673 )     748       (2,952 )   (2,513 )     (439 )

Net (decrease) increase in cash and cash equivalents

   (9 )   (840 )     831       47     231       (184 )

Cash and cash equivalents at beginning of period

   622     1,406       (784 )     566     335       231  

Cash and cash equivalents at end of period

   613     566       47       613     566       47  

 

                                         

Other information

                                          

Free cash flow per share (3)

 $ 1.07   $ 1.01     $ 0.06     $ 3.54   $ 3.46     $ 0.08  

Annualized cash flow yield (3)

   6.5 %   6.1 %     0.4  pts     6.5 %   6.1 %     0.4  pts
                                           

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 12

BCE
Consolidated Cash Flow Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)   TOTAL
2015		       Q4 15     Q3 15     Q2 15     Q1 15       TOTAL
2014		       Q4 14     Q3 14     Q2 14     Q1 14  

Net earnings

   2,730       542     791     814     583       2,718       594     703     707     714  

Adjustments to reconcile net earnings to cash flows from operating activities

                                                                  

Severance, acquisition and other costs

   446       152     46     24     224       216       58     66     54     38  

Depreciation and amortization

   3,420       867     860     854     839       3,452       852     855     879     866  

Post-employment benefit plans cost

   391       96     96     96     103       377       93     91     94     99  

Net interest expense

   900       223     225     229     223       921       236     225     226     234  

(Gains) losses on investments

   (72 )     1     19     (94 )   2       (10 )     6     -     (4 )   (12 )

Income taxes

   924       188     271     290     175       929       221     241     236     231  

Contributions to post-employment benefit plans

   (566 )     (317 )   (76 )   (92 )   (81 )     (683 )     (428 )   (82 )   (85 )   (88 )

Payments under other post-employment benefit plans

   (75 )     (19 )   (18 )   (18 )   (20 )     (73 )     (19 )   (18 )   (18 )   (18 )

Severance and other costs paid

   (190 )     (44 )   (45 )   (52 )   (49 )     (190 )     (44 )   (40 )   (38 )   (68 )

Interest paid

   (911 )     (229 )   (225 )   (230 )   (227 )     (907 )     (233 )   (214 )   (231 )   (229 )

Income taxes paid (net of refunds)

   (672 )     (154 )   (66 )   (119 )   (333 )     (743 )     (180 )   (92 )   (110 )   (361 )

Acquisition and other costs paid

   (292 )     (159 )   (33 )   (48 )   (52 )     (131 )     (68 )   (33 )   (16 )   (14 )

Net change in operating assets and liabilities

   241       363     33     187     (342 )     365       439     180     156     (410 )

Cash flows from operating activities

   6,274       1,510     1,878     1,841     1,045       6,241       1,527     1,882     1,850     982  

Bell Aliant dividends paid to BCE

   -       -     -     -     -       95       -     47     48     -  

Capital expenditures

   (3,626 )     (958 )   (927 )   (914 )   (827 )     (3,717 )     (1,076 )   (975 )   (937 )   (729 )

Cash dividends paid on preferred shares

   (150 )     (37 )   (37 )   (37 )   (39 )     (134 )     (40 )   (31 )   (31 )   (32 )

Cash dividends paid by subsidiaries to non-controlling interest

   (41 )     (8 )   (26 )   (7 )   -       (145 )     (1 )   (69 )   (68 )   (7 )

Acquisition and other costs paid

   292       159     33     48     52       131       68     33     16     14  

Voluntary defined benefit pension plan contribution

   250       250     -     -     -       350       350     -     -     -  

Bell Aliant Free Cash Flow

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

Free Cash Flow

   2,999       916     921     931     231       2,744       833     834     815     262  

Bell Aliant free cash flow, excluding dividends paid

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

Business acquisitions

   (311 )     (25 )   (2 )   (284 )   -       (18 )     (8 )   (10 )   -     -  

Acquisition and other costs paid

   (292 )     (159 )   (33 )   (48 )   (52 )     (131 )     (68 )   (33 )   (16 )   (14 )

Voluntary defined benefit pension plan contribution

   (250 )     (250 )   -     -     -       (350 )     (350 )   -     -     -  

Business dispositions

   409       -     2     407     -       720       (4 )   186     -     538  

Acquisition of spectrum licences

   (535 )     (1 )   (5 )   (429 )   (100 )     (566 )     -     -     (453 )   (113 )

Other investing activities

   (51 )     (36 )   (13 )   (7 )   5       11       13     1     2     (5 )

Increase (decrease) in notes payable and bank advances

   76       (596 )   555     (574 )   691       469       (132 )   443     (443 )   601  

Increase (reduction) in securitized trade receivables

   10       -     (305 )   315     -       -       -     -     -     -  

Issue of long-term debt

   1,498       996     -     -     502       1,428       2     1,243     150     33  

Repayment of long-term debt

   (2,084 )     (1,107 )   (108 )   (723 )   (146 )     (1,113 )     (445 )   (117 )   (136 )   (415 )

Privatization of Bell Aliant

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

Issue of common shares

   952       888     7     19     38       49       6     2     9     32  

Common shares issuance cost

   (35 )     (35 )   -     -     -       -       -     -     -     -  

Repurchase of shares for settlement of share-based payments

   (138 )     (41 )   (11 )   (13 )   (73 )     (83 )     (10 )   (8 )   (31 )   (34 )

Cash dividends paid on common shares

   (2,169 )     (552 )   (551 )   (547 )   (519 )     (1,893 )     (481 )   (480 )   (480 )   (452 )

Other financing activities

   (32 )     (7 )   (4 )   (3 )   (18 )     (29 )     (6 )   (7 )   (2 )   (14 )

 

  (2,952 )     (925 )   (468 )   (1,887 )   328       (2,513 )     (1,673 )   422     (1,385 )   123  

Net increase (decrease) in cash and cash equivalents

   47       (9 )   453     (956 )   559       231       (840 )   1,256     (570 )   385  

Cash and cash equivalents at beginning of period

   566       622     169     1,125     566       335       1,406     150     720     335  

Cash and cash equivalents at end of period

   613       613     622     169     1,125       566       566     1,406     150     720  

 

                                                                 

 Other information

                                                                                                                                                             

 Free cash flow per share

 $ 3.54     $ 1.07   $  1.09   $ 1.11     $ 0.27     $ 3.46     $ 1.01   $ 1.06   $ 1.05     $ 0.34   

 Annualized cash flow yield

   6.5 %     6.5 %   6.3 %   6.3 %   6.0 %     6.1 %     6.1 %   6.5 %   6.6 %   7.0 %

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 13

Accompanying Notes

  Beginning January 1, 2015, we report our results in three segments: Bell Wireless, Bell Wireline and Bell Media. Our reporting structure reflects how we manage our business and how we classify our results 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 and up to, and including, June 30, 2015, 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 - Fourth 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, Free Cash Flow per share and Annualized Cash Flow Yield

The terms Free Cash Flow, Free Cash Flow per share and Annualized Cash Flow Yield 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 and other costs paid (which include significant litigation costs) 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 and other costs paid (which include significant litigation costs) 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 define Annualized Cash Flow Yield 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

We consider Free Cash Flow, Free Cash Flow per share and Annualized Cash Flow Yield 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, Free Cash Flow per share and Annualized Cash Flow Yield 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.

 

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 15

Accompanying Notes

  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.

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.

Net Debt Leverage Ratio

The Net Debt Leverage Ratio does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We use, and believe that certain investors and analysts use, the Net Debt Leverage Ratio as a measure of financial leverage.

The Net Debt Leverage Ratio represents Net Debt divided by Adjusted EBITDA. For the purposes of calculating our Net Debt Leverage Ratio, Adjusted EBITDA is twelve-month trailing Adjusted EBITDA.

Adjusted EBITDA to Net Interest Expense Ratio

The Ratio of Adjusted EBITDA to Net Interest Expense does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We use, and believe that certain investors and analysts use, the Adjusted EBITDA to Net Interest Expense Ratio as a measure of financial health of the company.

Adjusted EBITDA to net interest expense represents Adjusted EBITDA divided by net interest expense. For the purposes of calculating our Adjusted EBITDA to Net Interest Expense Ratio, Adjusted EBITDA is twelve-month trailing Adjusted EBITDA. Net interest expense is twelve-month trailing net interest expense as shown in our statements of cash flows and 50% of declared preferred share dividends as shown in our income statements.
 
(4) Key Performance Indicators (KPIs)

In addition to the Non-Gaap Financial Measures described previously, 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.

 

BCE Supplementary Financial Information - Fourth Quarter 2015 Page 16