EX-99.2 3 supp_q216.htm SUPPLEMENTARY FINANCIAL INFORMATION - SECOND QUARTER 2016 Supplementary Financial Information

Exhibit 99.2

 

 

BCE (1)
Consolidated Operational Data

(In millions of Canadian dollars, except share amounts) (unaudited)   Q2
2016		     Q2
2015		       $ change   % change       YTD
2016		     YTD 2015       $ change  

% change

  

Operating revenues

   5,340     5,326       14   0.3 %     10,610     10,566       44   0.4 %

Operating costs (A)

   (3,016 )   (3,061 )     45   1.5 %     (6,075 )   (6,131 )     56   0.9 %

Post-employment benefit plans service cost

   (56 )   (68 )     12   17.6 %     (104 )   (144 )     40   27.8 %

Adjusted EBITDA (2)

   2,268     2,197       71   3.2 %     4,431     4,291       140   3.3 %

Adjusted EBITDA margin (2)

   42.5 %   41.3 %         1.2  pts     41.8 %   40.6 %         1.2  pts

Severance, acquisition and other costs

   (57 )   (24 )     (33 ) n.m.       (99 )   (248 )     149   60.1 %

Depreciation

   (713 )   (720 )     7   1.0 %     (1,452 )   (1,432 )     (20 ) (1.4 %)

Amortization

   (156 )   (134 )     (22 ) (16.4 %)     (305 )   (261 )     (44 ) (16.9 %)

Finance costs

                                                  

Interest expense

   (217 )   (230 )     13   5.7 %     (436 )   (456 )     20   4.4 %

Interest on post-employment benefit obligations

   (21 )   (28 )     7   25.0 %     (41 )   (55 )     14   25.5 %

Other income

   41     43       (2 ) (4.7 %)     64     23       41   n.m.  

Income taxes

   (315 )   (290 )     (25 ) (8.6 %)     (574 )   (465 )     (109 ) (23.4 %)

Net earnings

   830     814       16   2.0 %     1,588     1,397       191   13.7 %

Net earnings attributable to:

                                                  

Common shareholders

   778     759       19   2.5 %     1,485     1,291       194   15.0 %

Preferred shareholders

   35     39       (4 ) (10.3 %)     72     77       (5 ) (6.5 %)

Non-controlling interest

   17     16       1   6.3 %     31     29       2   6.9 %

Net earnings

   830     814       16   2.0 %     1,588     1,397       191   13.7 %

Net earnings per common share - basic

 $ 0.89   $ 0.90     $ (0.01 ) (1.1 %)   $ 1.71   $ 1.53     $ 0.18   11.8 %

Net earnings per common share - diluted

 $ 0.89   $ 0.90     $ (0.01 ) (1.1 %)   $ 1.71   $ 1.53     $ 0.18   11.8 %

Dividends per common share

 $ 0.6825   $ 0.6500     $ 0.0325   5.0 %   $ 1.3650   $ 1.3000     $ 0.0650   5.0 %

Average number of common shares outstanding - basic (millions)

   869.1     844.9                   868.1     843.0              

Average number of common shares outstanding - diluted (millions)

   870.3     846.2                   869.2     844.4              

Number of common shares outstanding (millions)

   869.5     848.6                   869.5     848.6              

Adjusted net earnings and EPS

                                                  

Net earnings attributable to common shareholders

   778     759       19   2.5 %     1,485     1,291       194   15.0 %

Severance, acquisition and other costs

   44     16       28   n.m.       75     180       (105 ) (58.3 %)

Net losses (gains) on investments

   2     (40 )     42   n.m.       (10 )   (38 )     28   73.7 %

Early debt redemption costs

   -     -       -   -       8     7       1   14.3 %

Adjusted net earnings (2)

   824     735       89   12.1 %     1,558     1,440       118   8.2 %

Impact on net earnings per share

 $ 0.05   $ (0.03 )   $ 0.08   n.m.     $ 0.08   $ 0.18     $ (0.10 ) (55.5 %)

Adjusted EPS (2)

 $ 0.94   $ 0.87     $ 0.07   8.0 %   $ 1.79   $ 1.71     $ 0.08   4.7 %

 

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

BCE Supplementary Financial Information - Second Quarter 2016 Page 2

BCE
Consolidated Operational Data - Historical Trend

(In millions of Canadian dollars, except share amounts) (unaudited)   YTD
2016		       Q2 16     Q1 16       TOTAL
2015		       Q4 15     Q3 15     Q2 15     Q1 15  

Operating revenues

   10,610       5,340     5,270       21,514       5,603     5,345     5,326     5,240  

Operating costs (A)

   (6,075 )     (3,016 )   (3,059 )     (12,682 )     (3,462 )   (3,089 )   (3,061 )   (3,070 )

Post-employment benefit plans service cost

   (104 )     (56 )   (48 )     (281 )     (68 )   (69 )   (68 )   (76 )

Adjusted EBITDA

   4,431       2,268     2,163       8,551       2,073     2,187     2,197     2,094  

Adjusted EBITDA margin

   41.8 %     42.5 %   41.0 %     39.7 %     37.0 %   40.9 %   41.3 %   40.0 %

Severance, acquisition and other costs

   (99 )     (57 )   (42 )     (446 )     (152 )   (46 )   (24 )   (224 )

Depreciation

   (1,452 )     (713 )   (739 )     (2,890 )     (731 )   (727 )   (720 )   (712 )

Amortization

   (305 )     (156 )   (149 )     (530 )     (136 )   (133 )   (134 )   (127 )

Finance costs

                                                      

Interest expense

   (436 )     (217 )   (219 )     (909 )     (226 )   (227 )   (230 )   (226 )

Interest on post-employment benefit obligations

   (41 )     (21 )   (20 )     (110 )     (28 )   (27 )   (28 )   (27 )

Other income (expense)

   64       41     23       (12 )     (70 )   35     43     (20 )

Income taxes

   (574 )     (315 )   (259 )     (924 )     (188 )   (271 )   (290 )   (175 )

Net earnings

   1,588       830     758       2,730       542     791     814     583  

Net earnings attributable to:

                                                      

Common shareholders

   1,485       778     707       2,526       496     739     759     532  

Preferred shareholders

   72       35     37       152       37     38     39     38  

Non-controlling interest

   31       17     14       52       9     14     16     13  

Net earnings

   1,588       830     758       2,730       542     791     814     583  

Net earnings per common share - basic

$

1.71

 

 

$

0.89

 

$

0.82

 

 

$

2.98

 

 

$

0.58

 

$

0.87

 

$

0.90

 

$

0.63

 

Net earnings per common share - diluted

 $ 1.71     $ 0.89   $ 0.82     $ 2.98     $ 0.58   $ 0.87   $ 0.90   $ 0.63  

Dividends per common share

$

1.3650

 

 

$

0.6825

 

$

0.6825

 

 

$

2.6000

 

 

$

0.6500

 

$

0.6500

 

$

0.6500

 

$

0.6500

 

Average number of common shares outstanding - basic (millions)

 

868.1

 

 

 

869.1

 

 

867.1

 

 

 

847.1

 

 

 

853.5

 

 

848.9

 

 

844.9

 

 

841.0

 

Average number of common shares outstanding - diluted (millions)

   869.2       870.3     868.1       848.3       854.9     850.1     846.2     842.6  

Number of common shares outstanding (millions)

   869.5       869.5     868.6       865.6       865.6     849.4     848.6     841.9  

Adjusted net earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   1,485       778     707       2,526       496     739     759     532  

Severance, acquisition and other costs

   75       44     31       327       112     35     16     164  

Net (gains) losses on investments

   (10 )     2     (12 )     (21 )     1     16     (40 )   2  

Early debt redemption costs

   8       -     8       13       6     -     -     7  

Adjusted net earnings

   1,558       824     734       2,845       615     790     735     705  

Impact on net earnings per share

 $ 0.08     $ 0.05   $ 0.03     $ 0.38     $ 0.14   $ 0.06   $ (0.03 ) $ 0.21  

Adjusted EPS

$

1.79

 

 

$

0.94

 

$

0.85

 

 

$

3.36

 

 

$

0.72

 

$

0.93

 

$

0.87

 

$

0.84

 

 

(A)  Excludes post-employment benefit plans service cost

BCE Supplementary Financial Information - Second Quarter 2016 Page 3

BCE
Segmented Data

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q2
2016		   Q2
2015		     $ change  

% change

     YTD
2016		   YTD
2015		     $ change  

% change

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

                                      

Bell Wireless

 1,735   1,697     38   2.2 %   3,428   3,334     94   2.8 %

Bell Wireline

 2,979   3,042     (63 ) (2.1 %)   5,962   6,069     (107 ) (1.8 %)

Bell Media

 779   740     39   5.3 %   1,520   1,466     54   3.7 %

Inter-segment eliminations

 (153 ) (153 )   -   -     (300 ) (303 )   3   1.0 %

Total

 5,340   5,326     14   0.3 %   10,610   10,566     44   0.4 %
                                       

Operating costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 (963 ) (980 )   17   1.7 %   (1,895 ) (1,905 )   10   0.5 %

Bell Wireline

 (1,706 ) (1,777 )   71   4.0 %   (3,432 ) (3,563 )   131   3.7 %

Bell Media

 (556 ) (525 )   (31 ) (5.9 %)   (1,152 ) (1,110 )   (42 ) (3.8 %)

Inter-segment eliminations

 153   153     -   -     300   303     (3 ) (1.0 %)

Total

 (3,072 ) (3,129 )   57   1.8 %   (6,179 ) (6,275 )   96   1.5 %
                                       

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 772   717     55   7.7 %   1,533   1,429     104   7.3 %

Margin

 44.5 % 42.3 %       2.2  pts   44.7 % 42.9 %       1.8  pts

Bell Wireline

 1,273   1,265     8   0.6 %   2,530   2,506     24   1.0 %

Margin

 42.7 % 41.6 %       1.1  pts   42.4 % 41.3 %       1.1  pts

Bell Media

 223   215     8   3.7 %   368   356     12   3.4 %

Margin

28.6

%

29.1

%

 

 

 

(0.5

) pts

 

24.2

%

24.3

%

 

 

 

(0.1

) pts

Total

 2,268   2,197     71   3.2 %   4,431   4,291     140   3.3 %

Margin

 42.5 % 41.3 %       1.2  pts   41.8 % 40.6 %       1.2  pts
                                       

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 183   188     5   2.7 %   345   339     (6 ) (1.8 %)

Capital intensity (3)

 10.5 % 11.1 %       0.6  pts   10.1 % 10.2 %       0.1  pts

Bell Wireline

 733   696     (37 ) (5.3 %)   1,402   1,352     (50 ) (3.7 %)

Capital intensity

 24.6 % 22.9 %       (1.7 ) pts   23.5 % 22.3 %       (1.2 ) pts

Bell Media

 34   30     (4 ) (13.3 %)   55   50     (5 ) (10.0 %)

Capital intensity

 4.4 % 4.1 %       (0.3 ) pts   3.6 % 3.4 %       (0.2 ) pts

Total

 950   914     (36 ) (3.9 %)   1,802   1,741     (61 ) (3.5 %)

Capital intensity

 17.8 % 17.2 %       (0.6 ) pts   17.0 % 16.5 %       (0.5 ) pts

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 4

BCE
Segmented Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD
2016		     Q2 16   Q1 16     Total
2015		     Q4 15   Q3 15   Q2 15   Q1 15  
                                       

Revenues

                                      

Bell Wireless

 3,428     1,735   1,693     6,876     1,770   1,772   1,697   1,637  

Bell Wireline

 5,962     2,979   2,983     12,258     3,161   3,028   3,042   3,027  

Bell Media

 1,520     779   741     2,974     816   692   740   726  

Inter-segment eliminations

 (300 )   (153 ) (147 )   (594 )   (144 ) (147 ) (153 ) (150 )

Total

 10,610     5,340   5,270     21,514     5,603   5,345   5,326   5,240  
                                       

Operating costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 (1,895 )   (963 ) (932 )   (4,048 )   (1,129 ) (1,014 ) (980 ) (925 )

Bell Wireline

 (3,432 )   (1,706 ) (1,726 )   (7,258 )   (1,913 ) (1,782 ) (1,777 ) (1,786 )

Bell Media

 (1,152 )   (556 ) (596 )   (2,251 )   (632 ) (509 ) (525 ) (585 )

Inter-segment eliminations

 300     153   147     594     144   147   153   150  

Total

 (6,179 )   (3,072 ) (3,107 )   (12,963 )   (3,530 ) (3,158 ) (3,129 ) (3,146 )
                                       

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 1,533     772   761     2,828     641   758   717   712  

Margin

 44.7 %   44.5 % 44.9 %   41.1 %   36.2 % 42.8 % 42.3 % 43.5 %

Bell Wireline

 2,530     1,273   1,257     5,000     1,248   1,246   1,265   1,241  

Margin

 42.4 %   42.7 % 42.1 %   40.8 %   39.5 % 41.1 % 41.6 % 41.0 %

Bell Media

 368     223   145     723     184   183   215   141  

Margin

 24.2 %   28.6 % 19.6 %   24.3 %   22.5 % 26.4 % 29.1 % 19.4 %

Total

 4,431     2,268   2,163     8,551     2,073   2,187   2,197   2,094  

Margin

 41.8 %   42.5 % 41.0 %   39.7 %   37.0 % 40.9 % 41.3 % 40.0 %
                                       

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 345     183   162     716     193   184   188   151  

Capital intensity

 10.1 %   10.5 % 9.6 %   10.4 %   10.9 % 10.4 % 11.1 % 9.2 %

Bell Wireline

 1,402     733   669     2,809     741   716   696   656  

Capital intensity

 23.5 %   24.6 % 22.4 %   22.9 %   23.4 % 23.6 % 22.9 % 21.7 %

Bell Media

 55     34   21     101     24   27   30   20  

Capital intensity

 3.6 %   4.4 % 2.8 %   3.4 %   2.9 % 3.9 % 4.1 % 2.8 %

Total

 1,802     950   852     3,626     958   927   914   827  

Capital intensity

 17.0 %   17.8 % 16.2 %   16.9 %   17.1 % 17.3 % 17.2 % 15.8 %

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 5

Bell Wireless (1)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q2
2016		   Q2
2015		    

% change

     YTD
2016		   YTD
2015		    

% change

  

Bell Wireless

                              

Revenues

                              

Service

 1,610   1,539     4.6 %   3,189   3,039     4.9 %

Product

 114   149     (23.5 %)   218   276     (21.0 %)

Total external Bell Wireless revenues

 1,724   1,688     2.1 %   3,407   3,315     2.8 %

Inter-segment

 11   9     22.2 %   21   19     10.5 %

Total Bell Wireless operating revenues

 1,735   1,697     2.2 %   3,428   3,334     2.8 %

Operating costs

 (963 ) (980 )   1.7 %   (1,895 ) (1,905 )   0.5 %

Adjusted EBITDA

 772   717     7.7 %   1,533   1,429     7.3 %

Adjusted EBITDA margin (Total revenues)

 44.5 % 42.3 %   2.2  pts   44.7 % 42.9 %   1.8  pts

Adjusted EBITDA margin (Service revenues)

 48.0 % 46.6 %   1.4  pts   48.1 % 47.0 %   1.1  pts

Capital expenditures

183

 

188

 

 

2.7

%

 

345

 

339

 

 

(1.8

%)

Capital intensity

 10.5 % 11.1 %   0.6  pts   10.1 % 10.2 %   0.1  pts

Wireless gross activations

 379,233   384,973     (1.5 %)   710,856   726,333     (2.1 %)

Postpaid

 316,977   317,809     (0.3 %)   592,392   596,793     (0.7 %)

Wireless net activations

 44,730   22,110     102.3 %   34,862   6,196     462.7 %

Postpaid

 69,848   61,033     14.4 %   95,653   96,406     (0.8 %)

Wireless subscribers end of period (EOP)

 8,280,693   8,124,824     1.9 %   8,280,693   8,124,824     1.9 %

Postpaid

 7,471,069   7,206,453     3.7 %   7,471,069   7,206,453     3.7 %

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

 64.32   62.48     2.9 %   63.67   61.66     3.3 %

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

 1.35 % 1.49 %   0.14  pts   1.37 % 1.48 %   0.11  pts

Prepaid

 3.21 % 3.48 %   0.27  pts   3.32 % 3.54 %   0.22  pts

Postpaid

 1.15 % 1.23 %   0.08  pts   1.15 % 1.21 %   0.06  pts

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

 478   434     (10.1 %)   485   442     (9.7 %)

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 6

Bell Wireless - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD
2016		     Q2 16   Q1 16     TOTAL
2015		     Q4 15   Q3 15   Q2 15   Q1 15  

Bell Wireless

                                      

Revenues

                                      

Service

 3,189     1,610   1,579     6,246     1,588   1,619   1,539   1,500  

Product

 218     114   104     590     171   143   149   127  

Total external Bell Wireless revenues

 3,407     1,724   1,683     6,836     1,759   1,762   1,688   1,627  

Inter-segment

 21     11   10     40     11   10   9   10  

Total Bell Wireless operating revenues

 3,428     1,735   1,693     6,876     1,770   1,772   1,697   1,637  

Operating costs

 (1,895 )   (963 ) (932 )   (4,048 )   (1,129 ) (1,014 ) (980 ) (925 )

Adjusted EBITDA

 1,533     772   761     2,828     641   758   717   712  

Adjusted EBITDA margin (Total revenues)

 44.7 %   44.5 % 44.9 %   41.1 %   36.2 % 42.8 % 42.3 % 43.5 %

Adjusted EBITDA margin (Service revenues)

 48.1 %   48.0 % 48.2 %   45.3 %   40.4 % 46.8 % 46.6 % 47.5 %

Capital expenditures

345

 

 

183

 

162

 

 

716

 

 

193

 

184

 

188

 

151

 

Capital intensity

 10.1 %   10.5 % 9.6 %   10.4 %   10.9 % 10.4 % 11.1 % 9.2 %

Wireless gross activations

 710,856     379,233   331,623     1,600,147     449,650   424,164   384,973   341,360  

Postpaid

 592,392     316,977   275,415     1,338,141     387,696   353,652   317,809   278,984  

Wireless net activations

 34,862     44,730   (9,868 )   127,203     62,464   58,543   22,110   (15,914 )

Postpaid

 95,653     69,848   25,805     265,369     91,308   77,655   61,033   35,373  

Wireless subscribers EOP

 8,280,693     8,280,693   8,235,963     8,245,831     8,245,831   8,183,367   8,124,824   8,102,714  

Postpaid

 7,471,069     7,471,069   7,401,221     7,375,416     7,375,416   7,284,108   7,206,453   7,145,420  

ARPU ($/month)

 63.67     64.32   63.02     63.09     63.67   65.34   62.48   60.83  

Churn (%)(average per month)

 1.37 %   1.35 % 1.38 %   1.51 %   1.57 % 1.49 % 1.49 % 1.47 %

Prepaid

 3.32 %   3.21 % 3.42 %   3.32 %   3.19 % 2.98 % 3.48 % 3.60 %

Postpaid

 1.15 %   1.15 % 1.15 %   1.28 %   1.38 % 1.31 % 1.23 % 1.18 %

COA ($/subscriber)

 485     478   494     467     525   446   434   452  

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 7

Bell Wireline (1)

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q2
2016		   Q2
2015		    

% change

     YTD
2016		   YTD
2015		    

% change

  

Bell Wireline

                              

Data

 1,807   1,774     1.9 %   3,601   3,531     2.0 %

Local & access

 781   827     (5.6 %)   1,570   1,651     (4.9 %)

Long distance

 183   207     (11.6 %)   374   420     (11.0 %)

Equipment & other

 167   174     (4.0 %)   335   347     (3.5 %)

Total external revenues

 2,938   2,982     (1.5 %)   5,880   5,949     (1.2 %)

Inter-segment revenues

 41   60     (31.7 %)   82   120     (31.7 %)

Total Bell Wireline operating revenues

 2,979   3,042     (2.1 %)   5,962   6,069     (1.8 %)

Operating costs

 (1,706 ) (1,777 )   4.0 %   (3,432 ) (3,563 )   3.7 %

Adjusted EBITDA

 1,273   1,265     0.6 %   2,530   2,506     1.0 %

Adjusted EBITDA margin

 42.7 % 41.6 %   1.1  pts   42.4 % 41.3 %   1.1  pts

Capital expenditures

733

 

696

 

 

(5.3

%)

 

1,402

 

1,352

 

 

(3.7

%)

Capital intensity

 24.6 % 22.9 %   (1.7 ) pts   23.5 % 22.3 %   (1.2 ) pts

High-speed Internet

                              

High-speed Internet net activations

 7,539   18,606     (59.5 %)   27,322   58,256     (53.1 %)

High-speed Internet subscribers EOP (A)

 3,418,785   3,316,351     3.1 %   3,418,785   3,316,351     3.1 %

TV

                              

Net subscriber activations

 2,101   16,690     (87.4 %)   12,100   43,680     (72.3 %)

Internet protocol television (IPTV)

 35,255   50,466     (30.1 %)   82,995   111,329     (25.5 %)

Total subscribers EOP

 2,750,596   2,674,796     2.8 %   2,750,596   2,674,796     2.8 %

IPTV

 1,265,786   1,040,791     21.6 %   1,265,786   1,040,791     21.6 %

Local

                              

Network access services (NAS)

                              

Residential

 3,397,711   3,670,167     (7.4 %)   3,397,711   3,670,167     (7.4 %)

Business (A)

 3,078,972   3,233,485     (4.8 %)   3,078,972   3,233,485     (4.8 %)

Total (A)

 6,476,683   6,903,652     (6.2 %)   6,476,683   6,903,652     (6.2 %)

NAS net losses

                              

Residential

 (68,593 ) (75,819 )   9.5 %   (136,021 ) (141,689 )   4.0 %

Business

 (20,232 ) (37,690 )   46.3 %   (60,436 ) (81,759 )   26.1 %

Total

 (88,825 ) (113,509 )   21.7 %   (196,457 ) (223,448 )   12.1 %

 

(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 - Second Quarter 2016 Page 8

Bell Wireline - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD
2016		     Q2 16   Q1 16     TOTAL
2015		     Q4 15   Q3 15   Q2 15   Q1 15  

Bell Wireline

                                      

Data

 3,601     1,807   1,794     7,163     1,862   1,770   1,774   1,757  

Local & access

 1,570     781   789     3,271     802   818   827   824  

Long distance

 374     183   191     831     204   207   207   213  

Equipment & other

 335     167   168     778     250   181   174   173  

Total external revenues

 5,880     2,938   2,942     12,043     3,118   2,976   2,982   2,967  

Inter-segment revenues

 82     41   41     215     43   52   60   60  

Total Bell Wireline operating revenues

 5,962     2,979   2,983     12,258     3,161   3,028   3,042   3,027  

Operating costs

 (3,432 )   (1,706 ) (1,726 )   (7,258 )   (1,913 ) (1,782 ) (1,777 ) (1,786 )

Adjusted EBITDA

 2,530     1,273   1,257     5,000     1,248   1,246   1,265   1,241  

Adjusted EBITDA margin

 42.4 %   42.7 % 42.1 %   40.8 %   39.5 % 41.1 % 41.6 % 41.0 %

Capital expenditures

1,402

 

 

733

 

669

 

 

2,809

 

 

741

 

716

 

696

 

656

 

Capital intensity

 23.5 %   24.6 % 22.4 %   22.9 %   23.4 % 23.6 % 22.9 % 21.7 %

High-speed Internet

                                      

High-speed Internet net activations

 27,322     7,539   19,783     155,052     38,908   57,888   18,606   39,650  

High-speed Internet subscribers EOP (A)

 3,418,785     3,418,785   3,411,246     3,413,147     3,413,147   3,374,239   3,316,351   3,297,745  

TV

                                      

Net subscriber activations

 12,100     2,101   9,999     107,380     37,786   25,914   16,690   26,990  

IPTV

 82,995     35,255   47,740     253,329     74,092   67,908   50,466   60,863  

Total subscribers EOP

 2,750,596     2,750,596   2,748,495     2,738,496     2,738,496   2,700,710   2,674,796   2,658,106  

IPTV

 1,265,786     1,265,786   1,230,531     1,182,791     1,182,791   1,108,699   1,040,791   990,325  

Local

                                      

NAS

                                      

Residential

 3,397,711     3,397,711   3,466,304     3,533,732     3,533,732   3,591,813   3,670,167   3,745,986  

Business (A)

 3,078,972     3,078,972   3,099,204     3,154,934     3,154,934   3,203,763   3,233,485   3,271,175  

Total (A)

 6,476,683     6,476,683   6,565,508     6,688,666     6,688,666   6,795,576   6,903,652   7,017,161  

NAS net losses

                                      

Residential

 (136,021 )   (68,593 ) (67,428 )   (278,124 )   (58,081 ) (78,354 ) (75,819 ) (65,870 )

Business

 (60,436 )   (20,232 ) (40,204 )   (160,310 )   (48,829 ) (29,722 ) (37,690 ) (44,069 )

Total

 (196,457 )   (88,825 ) (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 - Second 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)            

 

June 30   March 31   December 31  

 

2016   2016   2015  

Debt due within one year

4,532

 

4,516

 

4,895

 

Long-term debt

 15,817   15,837   15,390  

Preferred shares - BCE (A)

2,002

 

2,002

 

2,002

 

Cash and cash equivalents

 (615 ) (423 ) (613 )

Net debt (2)

21,736

 

21,932

 

21,674

 

Net debt leverage ratio (2)

2.50

 

2.54

 

2.53

 

Adjusted EBITDA /net interest expense ratio (2)

9.09

 

8.89

 

8.76

 

 

            

 

Bell Media Inc. - Proportionate information                                  
(In millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD
2016		   Q2
2016		   Q1
2016		     Total
2015		   Q4
2015		   Q3
2015		   Q2
2015		   Q1
2015		  

Proportionate adjusted EBITDA

318

 

196

 

122

 

 

643

 

170

 

161

 

191

 

121

  

 

                                  

 

Cash flow information                                  
(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q2
2016		   Q2
2015		    

$ change

    

% change

     YTD
2016		   YTD
2015		   $ change    

% change

  

Free cash flow (FCF) (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash from operating activities, excluding acquisition and other costs paid

 1,929   1,889   40   2.1 %   3,247   2,986   261   8.7 %

Capital expenditures

 (950 ) (914 ) (36 ) (3.9 %)   (1,802 ) (1,741 ) (61 ) (3.5 %)

Dividends paid on preferred shares

 (35 ) (37 ) 2   5.4 %   (71 ) (76 ) 5   6.6 %

Dividends paid by subsidiaries to non-controlling interest

 (10 ) (7 ) (3 ) (42.9 %)   (22 ) (7 ) (15 ) n.m.  

FCF

 934   931   3   0.3 %   1,352   1,162   190   16.4 %
                                   

 

Cash flow information - Historical trend                                  
(In millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD
2016		   Q2
2016		   Q1
2016		     Total
2015		   Q4
2015		   Q3
2015		   Q2
2015		   Q1
2015		  

FCF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash from operating activities, excluding acquisition and other costs paid

 3,247   1,929   1,318     6,566   1,669   1,911   1,889   1,097  

Capital expenditures

 (1,802 ) (950 ) (852 )   (3,626 ) (958 ) (927 ) (914 ) (827 )

Dividends paid on preferred shares

 (71 ) (35 ) (36 )   (150 ) (37 ) (37 ) (37 ) (39 )

Dividends paid by subsidiaries to non-controlling interest

 (22 ) (10 ) (12 )   (41 ) (8 ) (26 ) (7 ) -  

Voluntary defined benefit pension plan contribution

 -   -   -     250   250   -   -   -  

FCF

 1,352   934   418     2,999   916   921   931   231  

 

                                  

 

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

BCE Supplementary Financial Information - Second Quarter 2016 Page 10

BCE
Consolidated Statements of Financial Position

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) June 30
2016		     March 31
2016		     December 31
2015		  

ASSETS

                

Current assets

                

Cash

 319     102     100  

Cash equivalents

 296     321     513  

Trade and other receivables

 2,671     2,817     3,009  

Inventory

 415     414     416  

Prepaid expenses

 543     543     393  

Other current assets

 197     223     377  

Total current assets

 4,441     4,420     4,808  

Non-current assets

                

Property, plant and equipment

 21,719     21,582     21,630  

Intangible assets

 11,430     11,334     11,176  

Deferred tax assets

 116     105     89  

Investments in associates and joint ventures

 1,110     1,105     1,119  

Other non-current assets

 834     782     794  

Goodwill

 8,618     8,618     8,377  

Total non-current assets

 43,827     43,526     43,185  

Total assets

 48,268     47,946     47,993  

LIABILITIES

                

Current liabilities

                

Trade payables and other liabilities

 3,996     4,077     4,287  

Interest payable

 142     146     148  

Dividends payable

 606     606     576  

Current tax liabilities

 122     37     86  

Debt due within one year

 4,532     4,516     4,895  

Total current liabilities

 9,398     9,382     9,992  

Non-current liabilities

                

Long-term debt

 15,817     15,837     15,390  

Deferred tax liabilities

 1,570     1,608     1,824  

Post-employment benefit obligation

 3,307     2,888     2,038  

Other non-current liabilities

 1,412     1,411     1,420  

Total non-current liabilities

 22,106     21,744     20,672  

Total liabilities

 31,504     31,126     30,664  

EQUITY

 

 

 

 

 

 

 

 

Equity attributable to BCE shareholders

                

Preferred shares

 4,004     4,004     4,004  

Common shares

 18,300     18,251     18,100  

Contributed surplus

 1,140     1,124     1,150  

Accumulated other comprehensive income

 48     55     119  

Deficit

 (7,039 )   (6,919 )   (6,350 )

Total equity attributable to BCE shareholders

 16,453     16,515     17,023  

Non-controlling interest

 311     305     306  

Total equity

 16,764     16,820     17,329  

Total liabilities and equity

 48,268     47,946     47,993  

Number of common shares outstanding (millions)

 869.5     868.6     865.6  

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 11

BCE
Consolidated Cash Flow Data

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q2
2016		   Q2
2015		     $ change     YTD
2016		   YTD
2015		     $ change  

Net earnings

 830   814     16     1,588   1,397     191  

Adjustments to reconcile net earnings to cash flows from operating activities

                              

Severance, acquisition and other costs

 57   24     33     99   248     (149 )

Depreciation and amortization

 869   854     15     1,757   1,693     64  

Post-employment benefit plans cost

 77   96     (19 )   145   199     (54 )

Net interest expense

 215   229     (14 )   433   452     (19 )

Losses (gains) on investments

 2   (94 )   96     (14 ) (92 )   78  

Income taxes

 315   290     25     574   465     109  

Contributions to post-employment benefit plans

 (80 ) (92 )   12     (170 ) (173 )   3  

Payments under other post-employment benefit plans

 (19 ) (18 )   (1 )   (38 ) (38 )   -  

Severance and other costs paid

 (61 ) (52 )   (9 )   (147 ) (101 )   (46 )

Interest paid

 (221 ) (230 )   9     (442 ) (457 )   15  

Income taxes paid (net of refunds)

 (102 ) (119 )   17     (340 ) (452 )   112  

Acquisition and other costs paid

 (39 ) (48 )   9     (67 ) (100 )   33  

Net change in operating assets and liabilities

 47   187     (140 )   (198 ) (155 )   (43 )

Cash flows from operating activities

 1,890   1,841     49     3,180   2,886     294  

Capital expenditures

 (950 ) (914 )   (36 )   (1,802 ) (1,741 )   (61 )

Cash dividends paid on preferred shares

 (35 ) (37 )   2     (71 ) (76 )   5  

Cash dividends paid by subsidiaries to non-controlling interest

 (10 ) (7 )   (3 )   (22 ) (7 )   (15 )

Acquisition and other costs paid

 39   48     (9 )   67   100     (33 )

Free cash flow

 934   931     3     1,352   1,162     190  

Business acquisitions

 (1 ) (284 )   283     (246 ) (284 )   38  

Acquisition and other costs paid

 (39 ) (48 )   9     (67 ) (100 )   33  

Business dispositions

 2   407     (405 )   18   407     (389 )

Acquisition of spectrum licences

 (1 ) (429 )   428     (1 ) (529 )   528  

Other investing activities

 (14 ) (7 )   (7 )   21   (2 )   23  

Increase (decrease) in notes payable and bank advances

 173   (574 )   747     898   117     781  

Increase in securitized trade receivables

 -   315     (315 )   -   315     (315 )

Issue of long-term debt

 -   -     -     747   502     245  

Repayment of long-term debt

 (270 ) (723 )   453     (1,580 ) (869 )   (711 )

Issue of common shares

 19   19     -     92   57     35  

Repurchase of shares for settlement of share-based payments

 (11 ) (13 )   2     (79 ) (86 )   7  

Cash dividends paid on common shares

 (592 ) (547 )   (45 )   (1,118 ) (1,066 )   (52 )

Other financing activities

 (8 ) (3 )   (5 )   (35 ) (21 )   (14 )

 

(742 ) (1,887 )   1,145     (1,350 ) (1,559 )   209  

Net increase (decrease) in cash and cash equivalents

 192   (956 )   1,148     2   (397 )   399  

Cash and cash equivalents at beginning of period

 423   1,125     (702 )   613   566     47  

Cash and cash equivalents at end of period

 615   169     446     615   169     446  

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 12

BCE
Consolidated Cash Flow Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD
2016		     Q2 16   Q1 16     TOTAL
2015		     Q4 15   Q3 15   Q2 15   Q1 15  

Net earnings

 1,588     830   758     2,730     542   791   814   583  

Adjustments to reconcile net earnings to cash flows from operating activities

                                      

Severance, acquisition and other costs

 99     57   42     446     152   46   24   224  

Depreciation and amortization

 1,757     869   888     3,420     867   860   854   839  

Post-employment benefit plans cost

 145     77   68     391     96   96   96   103  

Net interest expense

 433     215   218     900     223   225   229   223  

(Gains) losses on investments

 (14 )   2   (16 )   (72 )   1   19   (94 ) 2  

Income taxes

 574     315   259     924     188   271   290   175  

Contributions to post-employment benefit plans

 (170 )   (80 ) (90 )   (566 )   (317 ) (76 ) (92 ) (81 )

Payments under other post-employment benefit plans

 (38 )   (19 ) (19 )   (75 )   (19 ) (18 ) (18 ) (20 )

Severance and other costs paid

 (147 )   (61 ) (86 )   (190 )   (44 ) (45 ) (52 ) (49 )

Interest paid

 (442 )   (221 ) (221 )   (911 )   (229 ) (225 ) (230 ) (227 )

Income taxes paid (net of refunds)

 (340 )   (102 ) (238 )   (672 )   (154 ) (66 ) (119 ) (333 )

Acquisition and other costs paid

 (67 )   (39 ) (28 )   (292 )   (159 ) (33 ) (48 ) (52 )

Net change in operating assets and liabilities

 (198 )   47   (245 )   241     363   33   187   (342 )

Cash flows from operating activities

 3,180     1,890   1,290     6,274     1,510   1,878   1,841   1,045  

Capital expenditures

 (1,802 )   (950 ) (852 )   (3,626 )   (958 ) (927 ) (914 ) (827 )

Cash dividends paid on preferred shares

 (71 )   (35 ) (36 )   (150 )   (37 ) (37 ) (37 ) (39 )

Cash dividends paid by subsidiaries to non-controlling interest

 (22 )   (10 ) (12 )   (41 )   (8 ) (26 ) (7 ) -  

Acquisition and other costs paid

 67     39   28     292     159   33   48   52  

Voluntary defined benefit pension plan contribution

 -     -   -     250     250   -   -   -  

Free cash flow

 1,352     934   418     2,999     916   921   931   231  

Business acquisitions

 (246 )   (1 ) (245 )   (311 )   (25 ) (2 ) (284 ) -  

Acquisition and other costs paid

 (67 )   (39 ) (28 )   (292 )   (159 ) (33 ) (48 ) (52 )

Voluntary defined benefit pension plan contribution

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

Business dispositions

 18     2   16     409     -   2   407   -  

Acquisition of spectrum licences

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

Other investing activities

 21     (14 ) 35     (51 )   (36 ) (13 ) (7 ) 5  

Increase (decrease) in notes payable and bank advances

 898     173   725     76     (596 ) 555   (574 ) 691  

Increase (reduction) in securitized trade receivables

 -     -   -     10     -   (305 ) 315   -  

Issue of long-term debt

 747     -   747     1,498     996   -   -   502  

Repayment of long-term debt

 (1,580 )   (270 ) (1,310 )   (2,084 )   (1,107 ) (108 ) (723 ) (146 )

Issue of common shares

 92     19   73     952     888   7   19   38  

Common shares issuance cost

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

Repurchase of shares for settlement of share-based payments

 (79 )   (11 ) (68 )   (138 )   (41 ) (11 ) (13 ) (73 )

Cash dividends paid on common shares

 (1,118 )   (592 ) (526 )   (2,169 )   (552 ) (551 ) (547 ) (519 )

Other financing activities

 (35 )   (8 ) (27 )   (32 )   (7 ) (4 ) (3 ) (18 )

 

(1,350 )   (742 ) (608 )   (2,952 )   (925 ) (468 ) (1,887 ) 328  

Net increase (decrease) in cash and cash equivalents

 2     192   (190 )   47     (9 ) 453   (956 ) 559  

Cash and cash equivalents at beginning of period

 613     423   613     566     622   169   1,125   566  

Cash and cash equivalents at end of period

 615     615   423     613     613   622   169   1,125  

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 13

Accompanying Notes

(1) 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.

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.

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

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 14

Accompanying Notes

  Free cash flow

The term free cash flow does not have any standardized meaning under IFRS. Therefore, it is 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 consider free cash flow to be an important indicator of the financial strength and performance of our businesses because it shows 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 and to evaluate the financial strength and performance of our businesses.

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.

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.
 

 

BCE Supplementary Financial Information - Second Quarter 2016 Page 15

Accompanying Notes

  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.

The adjusted EBITDA to net interest expense ratio 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 - Second Quarter 2016 Page 16