EX-99.2 3 supp_q116.htm SUPPLEMENTARY FINANCIAL INFORMATION - FIRST QUARTER 2016 Supplementary Financial Information

Exhibit 99.2

 

 

 

BCE (1)
Consolidated Operational Data

(In millions of Canadian dollars, except share amounts) (unaudited)   Q1
2016		     Q1
2015		       $ change   % change  

Operating revenues

   5,270     5,240       30   0.6 %

Operating costs (A)

   (3,059 )   (3,070 )     11   0.4 %

Post-employment benefit plans service cost

   (48 )   (76 )     28   36.8 %

Adjusted EBITDA (2)

   2,163     2,094       69   3.3 %

Adjusted EBITDA margin (2)

   41.0 %   40.0 %         1.0  pts

Severance, acquisition and other costs

   (42 )   (224 )     182   81.3 %

Depreciation

   (739 )   (712 )     (27 ) (3.8 %)

Amortization

   (149 )   (127 )     (22 ) (17.3 %)

Finance costs

                        

Interest expense

   (219 )   (226 )     7   3.1 %

Interest on post-employment benefit obligations

   (20 )   (27 )     7   25.9 %

Other income (expense)

   23     (20 )     43   n.m.  

Income taxes

   (259 )   (175 )     (84 ) (48.0 %)

Net earnings

   758     583       175   30.0 %

Net earnings attributable to:

                        

Common shareholders

   707     532       175   32.9 %

Preferred shareholders

   37     38       (1 ) (2.6 %)

Non-controlling interest

   14     13       1   7.7 %

Net earnings

   758     583       175   30.0 %

Net earnings per common share - basic

$

0.82

 

$

0.63

 

 

$

0.19

 

30.2

%

Net earnings per common share - diluted

 $ 0.82   $ 0.63     $ 0.19   30.2 %

Dividends per common share

$

0.6825

 

$

0.6500

 

 

$

0.0325

 

5.0

%

Average number of common shares outstanding - basic (millions)

 

867.1

 

 

841.0

 

 

 

 

 

 

 

Average number of common shares outstanding - diluted (millions)

   868.1     842.6              

Number of common shares outstanding (millions)

   868.6     841.9              

 

                        

Adjusted net earnings and EPS

                        

Net earnings attributable to common shareholders

   707     532       175   32.9 %

Severance, acquisition and other costs

   31     164       (133 ) (81.1 %)

Net (gains) losses on investments

   (12 )   2       (14 ) n.m.  

Early debt redemption costs

   8     7       1   14.3 %

Adjusted net earnings (2)

   734     705       29   4.1 %

Impact on net earnings per share

 $ 0.03   $ 0.21     $ (0.18 ) (85.7 %)

 

                       

Adjusted EPS (2)

 $ 0.85   $ 0.84     $ 0.01   1.2 %

 

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

 

BCE Supplementary Financial Information - First Quarter 2016 Page 2

 

BCE
Consolidated Operational Data - Historical Trend

(In millions of Canadian dollars, except share amounts) (unaudited)   Q1 16       TOTAL
2015		       Q4 15     Q3 15     Q2 15     Q1 15  

Operating revenues

   5,270       21,514       5,603     5,345     5,326     5,240  

Operating costs (A)

   (3,059 )     (12,682 )     (3,462 )   (3,089 )   (3,061 )   (3,070 )

Post-employment benefit plans service cost

   (48 )     (281 )     (68 )   (69 )   (68 )   (76 )

Adjusted EBITDA

   2,163       8,551       2,073     2,187     2,197     2,094  

Adjusted EBITDA margin

 

41.0

%

 

 

39.7

%

 

 

37.0

%

 

40.9

%

 

41.3

%

 

40.0

%

Severance, acquisition and other costs

   (42 )     (446 )     (152 )   (46 )   (24 )   (224 )

Depreciation

   (739 )     (2,890 )     (731 )   (727 )   (720 )   (712 )

Amortization

   (149 )     (530 )     (136 )   (133 )   (134 )   (127 )

Finance costs

                                        

Interest expense

   (219 )     (909 )     (226 )   (227 )   (230 )   (226 )

Interest on post-employment benefit obligations

   (20 )     (110 )     (28 )   (27 )   (28 )   (27 )

Other income (expense)

   23       (12 )     (70 )   35     43     (20 )

Income taxes

   (259 )     (924 )     (188 )   (271 )   (290 )   (175 )

Net earnings

   758       2,730       542     791     814     583  

Net earnings attributable to:

                                        

Common shareholders

   707       2,526       496     739     759     532  

Preferred shareholders

   37       152       37     38     39     38  

Non-controlling interest

   14       52       9     14     16     13  

Net earnings

   758       2,730       542     791     814     583  

 

                                        

Net earnings per common share - basic

 $ 0.82     $ 2.98     $ 0.58   $ 0.87   $ 0.90   $ 0.63  

Net earnings per common share - diluted

 $ 0.82     $ 2.98     $ 0.58   $ 0.87   $ 0.90   $ 0.63  

 

                                        

Dividends per common share

 $ 0.6825     $ 2.6000     $ 0.6500   $ 0.6500   $ 0.6500   $ 0.6500  

Average number of common shares outstanding - basic (millions)

 

867.1

 

 

 

847.1

 

 

 

853.5

 

 

848.9

 

 

844.9

 

 

841.0

 

Average number of common shares outstanding - diluted (millions)

   868.1       848.3       854.9     850.1     846.2     842.6  

Number of common shares outstanding (millions)

   868.6       865.6       865.6     849.4     848.6     841.9  

 

                                        

Adjusted net earnings and EPS

                                        

Net earnings attributable to common shareholders

   707       2,526       496     739     759     532  

Severance, acquisition and other costs

   31       327       112     35     16     164  

Net (gains) losses on investments

   (12 )     (21 )     1     16     (40 )   2  

Early debt redemption costs

   8       13       6     -     -     7  

Adjusted net earnings

   734       2,845       615     790     735     705  

Impact on net earnings per share

 $ 0.03     $ 0.38     $ 0.14   $ 0.06   $ (0.03 ) $ 0.21  

 

                                        

Adjusted EPS

 $ 0.85     $ 3.36     $ 0.72   $ 0.93   $ 0.87   $ 0.84  

 

(A) Excludes post-employment benefit plans service cost

 

BCE Supplementary Financial Information - First Quarter 2016 Page 3

 

BCE
Segmented Data

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1
2016		   Q1
2015		     $ change   % change  

 

                  

Revenues

                  

Bell Wireless

 1,693   1,637     56   3.4 %

Bell Wireline

 2,983   3,027     (44 ) (1.5 %)

Bell Media

 741   726     15   2.1 %

Inter-segment eliminations

 (147 ) (150 )   3   2.0 %

Total

 5,270   5,240     30   0.6 %

 

                  

Operating costs

                  

Bell Wireless

 (932 ) (925 )   (7 ) (0.8 %)

Bell Wireline

 (1,726 ) (1,786 )   60   3.4 %

Bell Media

 (596 ) (585 )   (11 ) (1.9 %)

Inter-segment eliminations

 147   150     (3 ) (2.0 %)

Total

 (3,107 ) (3,146 )   39   1.2 %

 

                  

Adjusted EBITDA

                  

Bell Wireless

 761   712     49   6.9 %

Margin

 44.9 % 43.5 %       1.4  pts

Bell Wireline

 1,257   1,241     16   1.3 %

Margin

 42.1 % 41.0 %       1.1  pts

Bell Media

 145   141     4   2.8 %

Margin

 19.6 % 19.4 %       0.2  pts

Total

 2,163   2,094     69   3.3 %

Margin

 41.0 % 40.0 %       1.0  pts

 

                  

Capital expenditures

                  

Bell Wireless

 162   151     (11 ) (7.3 %)

Capital intensity (3)

 9.6 % 9.2 %       (0.4 ) pts

Bell Wireline

 669   656     (13 ) (2.0 %)

Capital intensity

 22.4 % 21.7 %       (0.7 ) pts

Bell Media

 21   20     (1 ) (5.0 %)

Capital intensity

 2.8 % 2.8 %       -  

Total

 852   827     (25 ) (3.0 %)

Capital intensity

 16.2 % 15.8 %       (0.4 ) pts

 

BCE Supplementary Financial Information - First Quarter 2016 Page 4

 

BCE
Segmented Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 16   Total
2015		   Q4 15   Q3 15   Q2 15   Q1 15  

 

                        

Revenues

                        

Bell Wireless

 1,693   6,876   1,770   1,772   1,697   1,637  

Bell Wireline

 2,983   12,258   3,161   3,028   3,042   3,027  

Bell Media

 741   2,974   816   692   740   726  

Inter-segment eliminations

 (147 ) (594 ) (144 ) (147 ) (153 ) (150 )

Total

 5,270   21,514   5,603   5,345   5,326   5,240  

 

                        

Operating costs

                        

Bell Wireless

 (932 ) (4,048 ) (1,129 ) (1,014 ) (980 ) (925 )

Bell Wireline

 (1,726 ) (7,258 ) (1,913 ) (1,782 ) (1,777 ) (1,786 )

Bell Media

 (596 ) (2,251 ) (632 ) (509 ) (525 ) (585 )

Inter-segment eliminations

 147   594   144   147   153   150  

Total

 (3,107 ) (12,963 ) (3,530 ) (3,158 ) (3,129 ) (3,146 )

 

                        

Adjusted EBITDA

                        

Bell Wireless

 761   2,828   641   758   717   712  

Margin

 44.9 % 41.1 % 36.2 % 42.8 % 42.3 % 43.5 %

Bell Wireline

 1,257   5,000   1,248   1,246   1,265   1,241  

Margin

 42.1 % 40.8 % 39.5 % 41.1 % 41.6 % 41.0 %

Bell Media

 145   723   184   183   215   141  

Margin

 19.6 % 24.3 % 22.5 % 26.4 % 29.1 % 19.4 %

Total

 2,163   8,551   2,073   2,187   2,197   2,094  

Margin

 41.0 % 39.7 % 37.0 % 40.9 % 41.3 % 40.0 %

 

                        

Capital expenditures

                        

Bell Wireless

 162   716   193   184   188   151  

Capital intensity

 9.6 % 10.4 % 10.9 % 10.4 % 11.1 % 9.2 %

Bell Wireline

 669   2,809   741   716   696   656  

Capital intensity

 22.4 % 22.9 % 23.4 % 23.6 % 22.9 % 21.7 %

Bell Media

 21   101   24   27   30   20  

Capital intensity

 2.8 % 3.4 % 2.9 % 3.9 % 4.1 % 2.8 %

Total

 852   3,626   958   927   914   827  

Capital intensity

 16.2 % 16.9 % 17.1 % 17.3 % 17.2 % 15.8 %

 

BCE Supplementary Financial Information - First Quarter 2016 Page 5

 

Bell Wireless (1)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1
2016		   Q1
2015		     % change  

Bell Wireless

              

Revenues

              

Service

 1,579   1,500     5.3 %

Product

 104   127     (18.1 %)

Total external Bell Wireless revenues

 1,683   1,627     3.4 %

Inter-segment

 10   10     -  

Total Bell Wireless operating revenues

 1,693   1,637     3.4 %

Operating costs

 (932 ) (925 )   (0.8 %)

Adjusted EBITDA

 761   712     6.9 %

Adjusted EBITDA margin (Total revenues)

 44.9 % 43.5 %   1.4  pts

Adjusted EBITDA margin (Service revenues)

 48.2 % 47.5 %   0.7  pts

 

              

Capital expenditures

 162   151     (7.3 %)

Capital intensity

 9.6 % 9.2 %   (0.4 ) pts

Wireless gross activations

331,623

 

341,360

 

 

(2.9

%)

Postpaid

275,415

 

278,984

 

 

(1.3

%)

Wireless net activations

(9,868

)

(15,914

)

 

38.0

%

Postpaid

25,805

 

35,373

 

 

(27.0

%)

Wireless subscribers end of period (EOP)

8,235,963

 

8,102,714

 

 

1.6

%

Postpaid

7,401,221

 

7,145,420

 

 

3.6

%

Average revenue per user (3) (ARPU)($/month)

 63.02   60.83     3.6 %

Churn (%) (3)(average per month)

1.38

%

1.47

%

 

0.09

 pts

Prepaid

 3.42 % 3.60 %   0.18  pts

Postpaid

1.15

%

1.18

%

 

0.03

 pts

Cost of acquisition (COA) (3) ($/subscriber)

 494   452     (9.3 %)

 

BCE Supplementary Financial Information - First Quarter 2016 Page 6

 

Bell Wireless - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 16     TOTAL
2015		     Q4 15   Q3 15   Q2 15   Q1 15  

Bell Wireless

                            

Revenues

                            

Service

 1,579     6,246     1,588   1,619   1,539   1,500  

Product

 104     590     171   143   149   127  

Total external Bell Wireless revenues

 1,683     6,836     1,759   1,762   1,688   1,627  

Inter-segment

 10     40     11   10   9   10  

Total Bell Wireless operating revenues

 1,693     6,876     1,770   1,772   1,697   1,637  

Operating costs

 (932 )   (4,048 )   (1,129 ) (1,014 ) (980 ) (925 )

Adjusted EBITDA

 761     2,828     641   758   717   712  

Adjusted EBITDA margin (Total revenues)

 44.9 %   41.1 %   36.2 % 42.8 % 42.3 % 43.5 %

Adjusted EBITDA margin (Service revenues)

 48.2 %   45.3 %   40.4 % 46.8 % 46.6 % 47.5 %

 

                            

Capital expenditures

 162     716     193   184   188   151  

Capital intensity

9.6

%

 

10.4

%

 

10.9

%

10.4

%

11.1

%

9.2

%

Wireless gross activations

331,623

 

 

1,600,147

 

 

449,650

 

424,164

 

384,973

 

341,360

 

Postpaid

275,415

 

 

1,338,141

 

 

387,696

 

353,652

 

317,809

 

278,984

 

Wireless net activations

(9,868

)

 

127,203

 

 

62,464

 

58,543

 

22,110

 

(15,914

)

Postpaid

25,805

 

 

265,369

 

 

91,308

 

77,655

 

61,033

 

35,373

 

Wireless subscribers EOP

8,235,963

 

 

8,245,831

 

 

8,245,831

 

8,183,367

 

8,124,824

 

8,102,714

 

Postpaid

7,401,221

 

 

7,375,416

 

 

7,375,416

 

7,284,108

 

7,206,453

 

7,145,420

 

ARPU ($/month)

63.02

 

 

63.09

 

 

63.67

 

65.34

 

62.48

 

60.83

 

Churn (%)(average per month)

1.38

%

 

1.51

%

 

1.57

%

1.49

%

1.49

%

1.47

%

Prepaid

3.42

%

 

3.32

%

 

3.19

%

2.98

%

3.48

%

3.60

%

Postpaid

1.15

%

 

1.28

%

 

1.38

%

1.31

%

1.23

%

1.18

%

COA ($/subscriber)

494

 

 

467

 

 

525

 

446

 

434

 

452

 

 

BCE Supplementary Financial Information - First Quarter 2016 Page 7

 

Bell Wireline (1)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1
2016		   Q1
2015		     % change  

Bell Wireline

              

Data

 1,794   1,757     2.1 %

Local & access

 789   824     (4.2 %)

Long distance

 191   213     (10.3 %)

Equipment & other

 168   173     (2.9 %)

Total external revenues

 2,942   2,967     (0.8 %)

Inter-segment revenues

 41   60     (31.7 %)

Total Bell Wireline operating revenues

 2,983   3,027     (1.5 %)

Operating costs

 (1,726 ) (1,786 )   3.4 %

Adjusted EBITDA

 1,257   1,241     1.3 %

Adjusted EBITDA Margin

 42.1 % 41.0 %   1.1  pts

 

              

Capital expenditures

 669   656     (2.0 %)

Capital intensity

 22.4 % 21.7 %   (0.7 ) pts

High-speed Internet

              

High-speed Internet net activations

 19,783   39,650     (50.1 %)

High-speed Internet subscribers EOP (A)

 3,411,246   3,297,745     3.4 %

TV

              

Net subscriber activations

 9,999   26,990     (63.0 %)

Internet protocol television (IPTV)

 47,740   60,863     (21.6 %)

Total subscribers EOP

 2,748,495   2,658,106     3.4 %

IPTV

 1,230,531   990,325     24.3 %

Local

              

Network access services (NAS)

              

Residential

 3,466,304   3,745,986     (7.5 %)

Business (A)

 3,099,204   3,271,175     (5.3 %)

Total (A)

 6,565,508   7,017,161     (6.4 %)

NAS net losses

              

Residential

 (67,428 ) (65,870 )   (2.4 %)

Business

 (40,204 ) (44,069 )   8.8 %

Total

 (107,632 ) (109,939 )   2.1 %

 

(A) Our Q1 2016 business Internet and business NAS subscriber bases reflect a beginning of period adjustment to reduce the number of subscribers by 21,684 and 15,526, respectively, in order to align practices as a result of the integration of our former Bell Aliant segment (Bell Aliant).

 

BCE Supplementary Financial Information - First Quarter 2016 Page 8

 

Bell Wireline - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 16     TOTAL
2015		     Q4 15   Q3 15   Q2 15   Q1 15  

Bell Wireline

                            

Data

 1,794     7,163     1,862   1,770   1,774   1,757  

Local & access

 789     3,271     802   818   827   824  

Long distance

 191     831     204   207   207   213  

Equipment & other

 168     778     250   181   174   173  

Total external revenues

 2,942     12,043     3,118   2,976   2,982   2,967  

Inter-segment revenues

 41     215     43   52   60   60  

Total Bell Wireline operating revenues

 2,983     12,258     3,161   3,028   3,042   3,027  

Operating costs

 (1,726 )   (7,258 )   (1,913 ) (1,782 ) (1,777 ) (1,786 )

Adjusted EBITDA

 1,257     5,000     1,248   1,246   1,265   1,241  

Adjusted EBITDA margin

 42.1 %   40.8 %   39.5 % 41.1 % 41.6 % 41.0 %

 

                            

Capital expenditures

 669     2,809     741   716   696   656  

Capital intensity

 22.4 %   22.9 %   23.4 % 23.6 % 22.9 % 21.7 %

High-speed Internet

                            

High-speed Internet net activations

 19,783     155,052     38,908   57,888   18,606   39,650  

High-speed Internet subscribers EOP (A)

 3,411,246     3,413,147     3,413,147   3,374,239   3,316,351   3,297,745  

TV

                            

Net subscriber activations

 9,999     107,380     37,786   25,914   16,690   26,990  

IPTV

 47,740     253,329     74,092   67,908   50,466   60,863  

Total subscribers EOP

 2,748,495     2,738,496     2,738,496   2,700,710   2,674,796   2,658,106  

IPTV

 1,230,531     1,182,791     1,182,791   1,108,699   1,040,791   990,325  

Local

                            

NAS

                            

Residential

 3,466,304     3,533,732     3,533,732   3,591,813   3,670,167   3,745,986  

Business (A)

 3,099,204     3,154,934     3,154,934   3,203,763   3,233,485   3,271,175  

Total (A)

 6,565,508     6,688,666     6,688,666   6,795,576   6,903,652   7,017,161  

NAS net losses

                            

Residential

 (67,428 )   (278,124 )   (58,081 ) (78,354 ) (75,819 ) (65,870 )

Business

 (40,204 )   (160,310 )   (48,829 ) (29,722 ) (37,690 ) (44,069 )

Total

 (107,632 )   (438,434 )   (106,910 ) (108,076 ) (113,509 ) (109,939 )

 

(A) Our Q1 2016 business Internet and business NAS subscriber bases reflect a beginning of period adjustment to reduce the number of subscribers by 21,684 and 15,526, respectively, in order to align practices as a result of the integration of Bell Aliant.

 

BCE Supplementary Financial Information - First Quarter 2016 Page 9

 

BCE
Net debt and other information

BCE - Net debt and preferred shares

        

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

        

 

March 31   December 31  

 

2016   2015  

Debt due within one year

 4,516   4,895  

Long-term debt

 15,837   15,390  

Preferred shares - BCE (A)

 2,002   2,002  

Cash and cash equivalents

 (423 ) (613 )

Net Debt (2)

 21,932   21,674  

 

        

Net debt leverage ratio (2)

 2.54   2.53  

Adjusted EBITDA /net interest expense ratio(2)

 8.89   8.76  
         

 

Bell Media Inc. - Proportionate Information

            

 

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

Q1
2016

   Total
2015		 Q4
2015		 Q3
2015		 Q2
2015

Q1
2015
               

Proportionate adjusted EBITDA

122

   643 170 161 191

121
               

 

Cash Flow Information

                

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

 Q1
2016		   Q1
2015		  

$ change

  

% change

  

Free Cash Flow (FCF) (2)

                

Cash from operating activities, excluding acquisition and other costs paid

 1,318   1,097   221   20.1 %

Capital expenditures

 (852 ) (827 ) (25 ) (3.0 %)

Dividends paid on preferred shares

 (36 ) (39 ) 3   7.7 %

Dividends paid by subsidiaries to non-controlling interest

 (12 ) -   (12 ) n.m.  

FCF

 418   231   187   81.0 %
                 

 

Cash Flow Information - Historical Trend

                          

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

 Q1
2016		     Total
2015		   Q4
2015		   Q3
2015		   Q2
2015		   Q1
2015		  

FCF

                          

Cash from operating activities, excluding acquisition and other costs paid

 1,318     6,566   1,669   1,911   1,889   1,097  

Capital expenditures

 (852 )   (3,626 ) (958 ) (927 ) (914 ) (827 )

Dividends paid on preferred shares

 (36 )   (150 ) (37 ) (37 ) (37 ) (39 )

Dividends paid by subsidiaries to non-controlling interest

 (12 )   (41 ) (8 ) (26 ) (7 ) -  

Voluntary defined benefit pension plan contribution

 -     250   250   -   -   -  

FCF

 418     2,999   916   921   931   231  

 

                          

 

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

 

BCE Supplementary Financial Information - First Quarter 2016 Page 10

 

BCE
Consolidated Statements of Financial Position

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) March 31
2016		     December 31
2015		  

ASSETS

          

Current assets

          

Cash

 102     100  

Cash equivalents

 321     513  

Trade and other receivables

 2,817     3,009  

Inventory

 414     416  

Prepaid expenses

 543     393  

Other current assets

 223     377  

Total current assets

 4,420     4,808  

Non-current assets

          

Property, plant and equipment

 21,582     21,630  

Intangible assets

 11,334     11,176  

Deferred tax assets

 105     89  

Investments in associates and joint ventures

 1,105     1,119  

Other non-current assets

 782     794  

Goodwill

 8,618     8,377  

Total non-current assets

 43,526     43,185  

Total assets

 47,946     47,993  

LIABILITIES

          

Current liabilities

          

Trade payables and other liabilities

 4,077     4,287  

Interest payable

 146     148  

Dividends payable

 606     576  

Current tax liabilities

 37     86  

Debt due within one year

 4,516     4,895  

Total current liabilities

 9,382     9,992  

Non-current liabilities

          

Long-term debt

 15,837     15,390  

Deferred tax liabilities

 1,608     1,824  

Post-employment benefit obligation

 2,888     2,038  

Other non-current liabilities

 1,411     1,420  

Total non-current liabilities

 21,744     20,672  

Total liabilities

 31,126     30,664  

 

          

EQUITY

          

Equity attributable to BCE shareholders

          

Preferred shares

 4,004     4,004  

Common shares

 18,251     18,100  

Contributed surplus

 1,124     1,150  

Accumulated other comprehensive income

 55     119  

Deficit

 (6,919 )   (6,350 )

Total equity attributable to BCE shareholders

 16,515     17,023  

Non-controlling interest

 305     306  

Total equity

 16,820     17,329  

Total liabilities and equity

 47,946     47,993  

Number of common shares outstanding (millions)

 868.6     865.6  

 

BCE Supplementary Financial Information - First Quarter 2016 Page 11

 

BCE
Consolidated Cash Flow Data

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)   Q1
2016		       Q1
2015		      

$ change

  

 

                      

Net earnings

   758       583       175  

Adjustments to reconcile net earnings to cash flows from operating activities

                      

Severance, acquisition and other costs

   42       224       (182 )

Depreciation and amortization

   888       839       49  

Post-employment benefit plans cost

   68       103       (35 )

Net interest expense

   218       223       (5 )

(Gains) losses on investments

   (16 )     2       (18 )

Income taxes

   259       175       84  

Contributions to post-employment benefit plans

   (90 )     (81 )     (9 )

Payments under other post-employment benefit plans

   (19 )     (20 )     1  

Severance and other costs paid

   (86 )     (49 )     (37 )

Interest paid

   (221 )     (227 )     6  

Income taxes paid (net of refunds)

   (238 )     (333 )     95  

Acquisition and other costs paid

   (28 )     (52 )     24  

Net change in operating assets and liabilities

   (245 )     (342 )     97  

Cash flows from operating activities

   1,290       1,045       245  

Capital expenditures

   (852 )     (827 )     (25 )

Cash dividends paid on preferred shares

   (36 )     (39 )     3  

Cash dividends paid by subsidiaries to non-controlling interest

   (12 )     -       (12 )

Acquisition and other costs paid

   28       52       (24 )

Free cash flow

   418       231       187  

Business acquisitions

   (245 )     -       (245 )

Acquisition and other costs paid

   (28 )     (52 )     24  

Business dispositions

   16       -       16  

Spectrum payment

   -       (100 )     100  

Other investing activities

   35       5       30  

Increase in notes payable and bank advances

   725       691       34  

Issue of long-term debt

   747       502       245  

Repayment of long-term debt

   (1,310 )     (146 )     (1,164 )

Issue of common shares

   73       38       35  

Repurchase of shares for settlement of share-based payments

   (68 )     (73 )     5  

Cash dividends paid on common shares

   (526 )     (519 )     (7 )

Other financing activities

   (27 )     (18 )     (9 )

 

  (608 )     328       (936 )

Net (decrease) increase in cash and cash equivalents

   (190 )     559       (749 )

Cash and cash equivalents at beginning of period

   613       566       47  

Cash and cash equivalents at end of period

   423       1,125       (702 )

 

                      

Other information

                      

Free cash flow per share (2)

 $ 0.48     $ 0.27     $ 0.21  

Annualized cash flow yield (2)

   6.2 %     6.0 %     0.2  pts

 

BCE Supplementary Financial Information - First Quarter 2016 Page 12

 

BCE
Consolidated Cash Flow Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)   Q1 16       TOTAL
2015		       Q4 15     Q3 15     Q2 15     Q1 15  
                                         

Net earnings

   758       2,730       542     791     814     583  

Adjustments to reconcile net earnings to cash flows from operating activities

                                        

Severance, acquisition and other costs

   42       446       152     46     24     224  

Depreciation and amortization

   888       3,420       867     860     854     839  

Post-employment benefit plans cost

   68       391       96     96     96     103  

Net interest expense

   218       900       223     225     229     223  

(Gains) losses on investments

   (16 )     (72 )     1     19     (94 )   2  

Income taxes

   259       924       188     271     290     175  

Contributions to post-employment benefit plans

   (90 )     (566 )     (317 )   (76 )   (92 )   (81 )

Payments under other post-employment benefit plans

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

Severance and other costs paid

   (86 )     (190 )     (44 )   (45 )   (52 )   (49 )

Interest paid

   (221 )     (911 )     (229 )   (225 )   (230 )   (227 )

Income taxes paid (net of refunds)

   (238 )     (672 )     (154 )   (66 )   (119 )   (333 )

Acquisition and other costs paid

   (28 )     (292 )     (159 )   (33 )   (48 )   (52 )

Net change in operating assets and liabilities

   (245 )     241       363     33     187     (342 )

Cash flows from operating activities

   1,290       6,274       1,510     1,878     1,841     1,045  

Capital expenditures

   (852 )     (3,626 )     (958 )   (927 )   (914 )   (827 )

Cash dividends paid on preferred shares

   (36 )     (150 )     (37 )   (37 )   (37 )   (39 )

Cash dividends paid by subsidiaries to non-controlling interest

   (12 )     (41 )     (8 )   (26 )   (7 )   -  

Acquisition and other costs paid

   28       292       159     33     48     52  

Voluntary defined benefit pension plan contribution

   -       250       250     -     -     -  

Free cash flow

   418       2,999       916     921     931     231  

Business acquisitions

   (245 )     (311 )     (25 )   (2 )   (284 )   -  

Acquisition and other costs paid

   (28 )     (292 )     (159 )   (33 )   (48 )   (52 )

Voluntary defined benefit pension plan contribution

   -       (250 )     (250 )   -     -     -  

Business dispositions

   16       409       -     2     407     -  

Spectrum payment

   -       (535 )     (1 )   (5 )   (429 )   (100 )

Other investing activities

   35       (51 )     (36 )   (13 )   (7 )   5  

Increase (decrease) in notes payable and bank advances

   725       76       (596 )   555     (574 )   691  

Increase (reduction) in securitized trade receivables

   -       10       -     (305 )   315     -  

Issue of long-term debt

   747       1,498       996     -     -     502  

Repayment of long-term debt

   (1,310 )     (2,084 )     (1,107 )   (108 )   (723 )   (146 )

Issue of common shares

   73       952       888     7     19     38  

Common shares issuance cost

   -       (35 )     (35 )   -     -     -  

Repurchase of shares for settlement of share-based payments

   (68 )     (138 )     (41 )   (11 )   (13 )   (73 )

Cash dividends paid on common shares

   (526 )     (2,169 )     (552 )   (551 )   (547 )   (519 )

Other financing activities

   (27 )     (32 )     (7 )   (4 )   (3 )   (18 )

 

  (608 )     (2,952 )     (925 )   (468 )   (1,887 )   328  

Net (decrease) increase in cash and cash equivalents

   (190 )     47       (9 )   453     (956 )   559  

Cash and cash equivalents at beginning of period

   613       566       622     169     1,125     566  

Cash and cash equivalents at end of period

   423       613       613     622     169     1,125  
                                         

Other information

                                        

Free cash flow per share

 $ 0.48     $ 3.54     $ 1.07   $ 1.09   $ 1.11   $ 0.27  

Annualized cash flow yield

   6.2 %     6.5 %     6.5 %   6.3 %   6.3 %   6.0 %

 

BCE Supplementary Financial Information - First Quarter 2016 Page 13

 

Accompanying Notes

  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., Bell Canada, their subsidiaries, joint arrangements and associates.
 
(2) 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) as shown in BCE’s consolidated income statements. Adjusted EBITDA for BCE’s segments is the same as segment profit as reported in BCE’s consolidated financial statements. 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.

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.

BCE Supplementary Financial Information - First Quarter 2016 Page 14

 

Accompanying Notes

  The most comparable IFRS financial measures are net earnings attributable to common shareholders and EPS, as reconciled in this document.

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.

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.

We define free cash flow per share as follows:

Free cash flow
Average number of common shares outstanding for the period

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, as reconciled in this document.

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, as shown in BCE’s consolidated statements of financial position. 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 2016 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.

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.
 
(3) 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 for the specified period. 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 - First Quarter 2016 Page 16