EX-99.2 3 992-supp_q118.htm SUPPLEMENTARY FINANCIAL INFORMATION - FIRST QUARTER 2018 Supplementary Financial Information

Exhibit 99.2

 

 

BCE (1) (2) (3)
Consolidated Operational Data

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

   Q1
2018		     Q1
2017		       $ change   % change  

Operating revenues

                        

Service

   4,964     4,811       153   3.2 %

Product

   626     525       101   19.2 %

Total operating revenues

   5,590     5,336       254   4.8 %

Operating costs

   (3,263 )   (3,120 )     (143 ) (4.6 %)

Post-employment benefit plans service cost

   (73 )   (50 )     (23 ) (46.0 %)

Adjusted EBITDA (4)

   2,254     2,166       88   4.1 %

Adjusted EBITDA margin (4)

   40.3 %   40.6 %         (0.3 ) pts

Severance, acquisition and other costs

   -     (84 )     84   100.0 %

Depreciation

   (780 )   (724 )     (56 ) (7.7 %)

Amortization

   (212 )   (185 )     (27 ) (14.6 %)

Finance costs

                        

Interest expense

   (240 )   (234 )     (6 ) (2.6 %)

Interest on post-employment benefit obligations

   (17 )   (18 )     1   5.6 %

Other (expense) income

   (61 )   17       (78 ) n.m.  

Income taxes

   (235 )   (250 )     15   6.0 %

Net earnings

   709     688       21   3.1 %

Net earnings attributable to:

                        

Common shareholders

   661     642       19   3.0 %

Preferred shareholders

   36     31       5   16.1 %

Non-controlling interest

   12     15       (3 ) (20.0 %)

Net earnings

   709     688       21   3.1 %

Net earnings per common share - basic

 $ 0.73   $ 0.73       -   -  

Net earnings per common share - diluted

 $ 0.73   $ 0.73       -   -  

Dividends per common share

 $ 0.7550   $ 0.7175     $ 0.0375   5.2 %

Average number of common shares outstanding - basic (millions)

   900.2     875.7              

Average number of common shares outstanding - diluted (millions)

   900.6     876.6              

Number of common shares outstanding (millions)

   898.0     899.5              

Adjusted net earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   661     642       19   3.0 %

Severance, acquisition and other costs

   (1 )   65       (66 ) n.m.  

Net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans

   56     (18 )     74   n.m.  

Net losses on investments

   -     14       (14 ) (100.0 %)

Impairment charges

   3     -       3   n.m.  

Adjusted net earnings (4)

   719     703       16   2.3 %

Impact on net earnings per share

 $ 0.07   $ 0.07       -   -  

Adjusted EPS (4)

 $ 0.80   $ 0.80       -   -  

n.m. : not meaningful

 

BCE Supplementary Financial Information – First Quarter 2018 Page 2

 

BCE
Consolidated Operational Data - Historical Trend

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

   Q1 18       TOTAL
2017		       Q4 17     Q3 17     Q2 17     Q1 17  

Operating revenues

                                        

Service

   4,964       20,095       5,152     5,054     5,078     4,811  

Product

   626       2,662       884     643     610     525  

Total operating revenues

   5,590       22,757       6,036     5,697     5,688     5,336  

Operating costs

   (3,263 )     (13,233 )     (3,643 )   (3,228 )   (3,242 )   (3,120 )

Post-employment benefit plans service cost

   (73 )     (242 )     (64 )   (64 )   (64 )   (50 )

Adjusted EBITDA

   2,254       9,282       2,329     2,405     2,382     2,166  

Adjusted EBITDA margin

   40.3 %     40.8 %     38.6 %   42.2 %   41.9 %   40.6 %

Severance, acquisition and other costs

  

-

       (190 )     (47 )   (23 )   (36 )   (84 )

Depreciation

   (780 )     (3,034 )     (783 )   (760 )   (767 )   (724 )

Amortization

   (212 )     (810 )     (208 )   (207 )   (210 )   (185 )

Finance costs

                                        

Interest expense

   (240 )     (955 )     (241 )   (242 )   (238 )   (234 )

Interest on post-employment benefit obligations

   (17 )     (72 )     (18 )   (18 )   (18 )   (18 )

Other (expense) income

   (61 )     (102 )     (62 )   (56 )   (1 )   17  

Income taxes

   (235 )     (1,069 )     (272 )   (249 )   (298 )   (250 )

Net earnings

   709       3,050       698     850     814     688  

Net earnings attributable to:

                                        

Common shareholders

   661       2,866       656     803     765     642  

Preferred shareholders

   36       128       34     31     32     31  

Non-controlling interest

   12       56       8     16     17     15  

Net earnings

   709       3,050       698     850     814     688  

Net earnings per common share - basic

 $ 0.73     $ 3.20     $ 0.72   $ 0.90   $ 0.85   $ 0.73  

Net earnings per common share - diluted

 $ 0.73     $ 3.20     $ 0.72   $ 0.90   $ 0.85   $ 0.73  

Dividends per common share

 $ 0.7550     $ 2.8700     $ 0.7175   $ 0.7175   $ 0.7175   $ 0.7175  

Average number of common shares outstanding - basic (millions)

   900.2       894.3       900.6     900.4     900.1     875.7  

Average number of common shares outstanding - diluted (millions)

   900.6       894.9       901.4     901.1     901.0     876.6  

Number of common shares outstanding (millions)

   898.0       901.0       901.0     900.4     900.4     899.5  

Adjusted net earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   661       2,866       656     803     765     642  

Severance, acquisition and other costs

   (1 )     143       34     17     27     65  

Net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans

   56       (55 )     (29 )   (8 )   -     (18 )

Net losses on investments

   -       29       15     -     -     14  

Early debt redemption costs

   -       15       -     12     3     -  

Impairment charges

   3       60       60     -     -     -  

Adjusted net earnings

   719       3,058       736     824     795     703  

Impact on net earnings per share

 $ 0.07     $ 0.22     $ 0.10   $ 0.01   $ 0.04   $ 0.07  

Adjusted EPS

 $ 0.80     $ 3.42     $ 0.82   $ 0.91   $ 0.89   $ 0.80  

 

 

BCE Supplementary Financial Information – First Quarter 2018 Page 3

 

 

BCE
Segmented Data

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

 Q1
2018		   Q1
2017		     $ change  

% change

  
                   

Operating revenues

                  

Bell Wireless

 1,946   1,767     179   10.1 %

Bell Wireline

 3,084   2,977     107   3.6 %

Bell Media

 749   751     (2 ) (0.3 %)

Inter-segment eliminations

 (189 ) (159 )   (30 ) (18.9 %)

Total

 5,590   5,336     254   4.8 %
                   

Operating costs

                  

Bell Wireless

 (1,124 ) (998 )   (126 ) (12.6 %)

Bell Wireline

 (1,782 ) (1,714 )   (68 ) (4.0 %)

Bell Media

 (619 ) (617 )   (2 ) (0.3 %)

Inter-segment eliminations

 189   159     30   18.9 %

Total

 (3,336 ) (3,170 )   (166 ) (5.2 %)
                   

Adjusted EBITDA

                  

Bell Wireless

 822   769     53   6.9 %

Margin

 42.2 % 43.5 %       (1.3 ) pts

Bell Wireline

 1,302   1,263     39   3.1 %

Margin

 42.2 % 42.4 %       (0.2 ) pts

Bell Media

 130   134     (4 ) (3.0 %)

Margin

 17.4 % 17.8 %       (0.4 ) pts

Total

 2,254   2,166     88   4.1 %

Margin

 40.3 % 40.6 %       (0.3 ) pts
                   

Capital expenditures

                  

Bell Wireless

 164   136     (28 ) (20.6 %)

Capital intensity (5)

 8.4 % 7.7 %       (0.7 ) pts

Bell Wireline

 747   691     (56 ) (8.1 %)

Capital intensity

 24.2 % 23.2 %       (1.0 ) pts

Bell Media

 20   25     5   20.0 %

Capital intensity

 2.7 % 3.3 %       0.6 pts

Total

 931   852     (79 ) (9.3 %)

Capital intensity

 16.7 % 16.0 %       (0.7 ) pts

 

 

BCE Supplementary Financial Information – First Quarter 2018 Page 4

 

 

BCE
Segmented Data - Historical Trend

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

 Q1 18     TOTAL
2017		     Q4 17   Q3 17   Q2 17   Q1 17  
                             

Operating revenues

                            

Bell Wireless

 1,946     7,926     2,149   2,061   1,949   1,767  

Bell Wireline

 3,084     12,400     3,218   3,088   3,117   2,977  

Bell Media

 749     3,104     834   723   796   751  

Inter-segment eliminations

 (189 )   (673 )   (165 ) (175 ) (174 ) (159 )

Total

 5,590     22,757     6,036   5,697   5,688   5,336  
                             

Operating costs

                            

Bell Wireless

 (1,124 )   (4,550 )   (1,303 ) (1,151 ) (1,098 ) (998 )

Bell Wireline

 (1,782 )   (7,210 )   (1,906 ) (1,780 ) (1,810 ) (1,714 )

Bell Media

 (619 )   (2,388 )   (663 ) (536 ) (572 ) (617 )

Inter-segment eliminations

 189     673     165   175   174   159  

Total

 (3,336 )   (13,475 )   (3,707 ) (3,292 ) (3,306 ) (3,170 )
                             

Adjusted EBITDA

                            

Bell Wireless

 822     3,376     846   910   851   769  

Margin

 42.2 %   42.6 %   39.4 % 44.2 % 43.7 % 43.5 %

Bell Wireline

 1,302     5,190     1,312   1,308   1,307   1,263  

Margin

 42.2 %   41.9 %   40.8 % 42.4 % 41.9 % 42.4 %

Bell Media

 130     716     171   187   224   134  

Margin

 17.4 %   23.1 %   20.5 % 25.9 % 28.1 % 17.8 %

Total

 2,254     9,282     2,329   2,405   2,382   2,166  

Margin

 40.3 %   40.8 %   38.6 % 42.2 % 41.9 % 40.6 %
                             

Capital expenditures

                            

Bell Wireless

 164     731     218   186   191   136  

Capital intensity

 8.4 %   9.2 %   10.1 % 9.0 % 9.8 % 7.7 %

Bell Wireline

 747     3,174     845   820   818   691  

Capital intensity

 24.2 %   25.6 %   26.3 % 26.6 % 26.2 % 23.2 %

Bell Media

 20     129     37   34   33   25  

Capital intensity

 2.7 %   4.2 %   4.4 % 4.7 % 4.1 % 3.3 %

Total

 931     4,034     1,100   1,040   1,042   852  

Capital intensity

 16.7 %   17.7 %   18.2 % 18.3 % 18.3 % 16.0 %

 

 

BCE Supplementary Financial Information – First Quarter 2018 Page 5

 

 

BCE
Segmented Data - IFRS 15 Adoption Impacts (2)

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

TOTAL
2017 

 

Q4 17

 

Q3 17

 

Q2 17

 

Q1 17
 

 

 

 

As
previously
reported

IFRS 15
impacts

Upon
adoption of
IFRS 15

  

As
previously
reported

IFRS 15
impacts

Upon
adoption of
IFRS 15

  

As
previously
reported

IFRS 15
impacts

Upon
adoption of
IFRS 15

  

As
previously
reported

IFRS 15
impacts

Upon
adoption of
IFRS 15

  

As
previously
reported

IFRS 15
impacts

Upon
adoption of
IFRS 15
                                       

Operating revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

7,350

(1,260)

6,090

  

1,894

(338)

1,556

 

1,913

(323)

1,590

 

1,828

(309)

1,519

 

1,715

(290)

1,425

Product

533

1,303

1,836

  

176

417

593

 

127

344

471

 

131

299

430

 

99

243

342

Total Bell Wireless

7,883

43

7,926

  

2,070

79

2,149

 

2,040

21

2,061

 

1,959

(10)

1,949

 

1,814

(47)

1,767

Bell Wireline

12,415

(15)

12,400

  

3,222

(4)

3,218

 

3,092

(4)

3,088

 

3,121

(4)

3,117

 

2,980

(3)

2,977

Bell Media

3,104

-

3,104

  

834

-

834

 

723

-

723

 

796

-

796

 

751

-

751

Inter-segment eliminations

(683)

10

(673)

  

(168)

3

(165)

 

(177)

2

(175)

 

(177)

3

(174)

 

(161)

2

(159)

Total

22,719

38

22,757

  

5,958

78

6,036

 

5,678

19

5,697

 

5,699

(11)

5,688

 

5,384

(48)

5,336
                                       

Operating costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

(4,607)

57

(4,550)

  

(1,334)

31

(1,303)

 

(1,169)

18

(1,151)

 

(1,108)

10

(1,098)

 

(996)

(2)

(998)

Bell Wireline

(7,229)

19

(7,210)

  

(1,912)

6

(1,906)

 

(1,784)

4

(1,780)

 

(1,815)

5

(1,810)

 

(1,718)

4

(1,714)

Bell Media

(2,388)

-

(2,388)

  

(663)

-

(663)

 

(536)

-

(536)

 

(572)

-

(572)

 

(617)

-

(617)

Inter-segment eliminations

683

(10)

673

  

168

(3)

165

 

177

(2)

175

 

177

(3)

174

 

161

(2)

159

Total

(13,541)

66

(13,475)

  

(3,741)

34

(3,707)

 

(3,312)

20

(3,292)

 

(3,318)

12

(3,306)

 

(3,170)

-

(3,170)
                                       

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireless

3,276

100

3,376

  

736

110

846

 

871

39

910

 

851

-

851

 

818

(49)

769

Margin

41.6%

1.0 pts

42.6%

  

35.6%

3.8 pts

39.4%

 

42.7%

1.5 pts

44.2%

 

43.4%

0.3 pts

43.7%

 

45.1%

(1.6) pts

43.5%

Bell Wireline

5,186

4

5,190

  

1,310

2

1,312

 

1,308

-

1,308

 

1,306

1

1,307

 

1,262

1

1,263

Margin

41.8%

0.1 pts

41.9%

  

40.7%

0.1 pts

40.8%

 

42.3%

0.1 pts

42.4%

 

41.8%

0.1 pts

41.9%

 

42.3%

0.1 pts

42.4%

Bell Media

716

-

716

  

171

-

171

 

187

-

187

 

224

-

224

 

134

-

134

Margin

23.1%

-

23.1%

  

20.5%

-

20.5%

 

25.9%

-

25.9%

 

28.1%

-

28.1%

 

17.8%

-

17.8%
Total

9,178

104

9,282

  

2,217

112

2,329

 

2,366

39

2,405

 

2,381

1

2,382

 

2,214

(48)

2,166

Margin

40.4%

0.4 pts

40.8%

  

37.2%

1.4 pts

38.6%

 

41.7%

0.5 pts

42.2%

 

41.8%

0.1 pts

41.9%

 

41.1%

(0.5) pts

40.6%

 

 

BCE Supplementary Financial Information – First Quarter 2018 Page 6

 

 

Bell Wireless (1) (2) (3)

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

 Q1
2018		   Q1
2017		    

% change

  

Bell Wireless

              

Operating revenues

              

External service revenues

 1,500   1,415     6.0 %

Inter-segment service revenues

 12   10     20.0 %

Total operating service revenues

 1,512   1,425     6.1 %

External product revenues

 434   341     27.3 %

Inter-segment product revenues

 -   1     (100.0 %)

Total operating product revenues

 434   342     26.9 %

Total external revenues

 1,934   1,756     10.1 %

Total operating revenues

 1,946   1,767     10.1 %

Operating costs

 (1,124 ) (998 )   (12.6 %)

Adjusted EBITDA

 822   769     6.9 %

Adjusted EBITDA margin (Total operating revenues)

 42.2 % 43.5 %   (1.3 ) pts

Adjusted EBITDA margin (Operating service revenues)

 54.4 % 54.0 %   0.4  pts

Capital expenditures

 164   136     (20.6 %)

Capital intensity

 8.4 % 7.7 %   (0.7 ) pts

Wireless gross activations

 404,790   348,452     16.2 %

Postpaid

 347,319   296,616     17.1 %

Wireless net activations

 44,377   672     n.m.  

Postpaid

 68,487   35,782     91.4 %

Wireless subscribers end of period (EOP)(A)(B)

 9,195,048   8,946,476     2.8 %

Postpaid(A)(B)

 8,471,021   8,144,936     4.0 %

Blended Average revenue per user(C)(5) (ARPU)($/month)

 54.28   54.31     (0.1 %)

Blended Average billing per user(C)(5) (ABPU)($/month)

 66.56   65.66     1.4 %

Churn (%) (5) (average per month)

 1.31 % 1.36 %   0.05 pts

Prepaid

 3.40 % 3.29 %   (0.11 ) pts

Postpaid

 1.13 % 1.17 %   0.04 pts

 

n.m. : not meaningful
(A) At the beginning of Q1 2018, we adjusted our postpaid wireless subscriber base to remove 16,116 subscribers with a corresponding increase to our high-speed Internet subscribers to reflect the transfer of fixed wireless Internet subscribers.
(B) In Q2 2017, Bell’s wireless subscriber base reflected the divestiture of 104,833 postpaid subscribers to TELUS Communications Inc. (Telus) related to BCE’s acquisition of MTS. Bell’s wireless subscriber base in Q2 2017 also reflected the removal of 7,268 subscribers (2,450 postpaid and 4,818 prepaid), due to the decommissioning of the code division multiple access (CDMA) network in western Canada.
(C) Our Q1 2018 blended ARPU and blended ABPU were adjusted to exclude the unfavourable retroactive impact of the recent CRTC decision on wholesale wireless domestic roaming rates of $14 million.

 

BCE Supplementary Financial Information – First Quarter 2018 Page 7

 

Bell Wireless - Historical Trend

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

 Q1 18     TOTAL
2017		     Q4 17   Q3 17   Q2 17   Q1 17  

Bell Wireless

                            

Operating revenues

                            

External service revenues

 1,500     6,048     1,545   1,580   1,508   1,415  

Inter-segment service revenues

 12     42     11   10   11   10  

Total operating service revenues

 1,512     6,090     1,556   1,590   1,519   1,425  

External product revenues

 434     1,833     593   469   430   341  

Inter-segment product revenues

 -     3     -   2   -   1  

Total operating product revenues

 434     1,836     593   471   430   342  

Total external revenues

 1,934     7,881     2,138   2,049   1,938   1,756  

Total operating revenues

 1,946     7,926     2,149   2,061   1,949   1,767  

Operating costs

 (1,124 )   (4,550 )   (1,303 ) (1,151 ) (1,098 ) (998 )

Adjusted EBITDA

 822     3,376     846   910   851   769  

Adjusted EBITDA margin (Total operating revenues)

 42.2 %   42.6 %   39.4 % 44.2 % 43.7 % 43.5 %

Adjusted EBITDA margin (Operating service revenues)

 54.4 %   55.4 %   54.4 % 57.2 % 56.0 % 54.0 %

Capital expenditures

164

 

 

731

 

 

218

 

186

 

191

 

136

 

Capital intensity

 8.4 %   9.2 %   10.1 % 9.0 % 9.8 % 7.7 %

Wireless gross activations

 404,790     1,780,478     568,555   460,053   403,418   348,452  

Postpaid

 347,319     1,532,425     505,432   390,985   339,392   296,616  

Wireless net activations (losses)

 44,377     333,084     158,514   106,982   66,916   672  

Postpaid

 68,487     416,779     175,204   117,182   88,611   35,782  

Wireless subscribers EOP(A)(B)

 9,195,048     9,166,787     9,166,787   9,008,273   8,901,291   8,946,476  

Postpaid(A)(B)

 8,471,021     8,418,650     8,418,650   8,243,446   8,126,264   8,144,936  

Blended ARPU(C) ($/month)

 54.28     55.88     55.77   57.77   55.61   54.31  

Blended ABPU(C) ($/month)

 66.56     67.77     68.27   69.78   67.28   65.66  

Churn (%)(average per month)

 1.31 %   1.36 %   1.51 % 1.32 % 1.27 % 1.36 %

Prepaid

 3.40 %   3.17 %   3.25 % 2.95 % 3.19 % 3.29 %

Postpaid

 1.13 %   1.19 %   1.35 % 1.16 % 1.08 % 1.17 %

 

(A) At the beginning of Q1 2018, we adjusted our postpaid wireless subscriber base to remove 16,116 subscribers with a corresponding increase to our high-speed Internet subscribers to reflect the transfer of fixed wireless Internet subscribers.
(B) In Q2 2017, Bell’s wireless subscriber base reflected the divestiture of 104,833 postpaid subscribers to Telus related to BCE’s acquisition of MTS. Bell’s wireless subscriber base in Q2 2017 also reflected the removal of 7,268 subscribers (2,450 postpaid and 4,818 prepaid), due to the decommissioning of the CDMA network in western Canada.
(C) Our Q1 2018 blended ARPU and blended ABPU were adjusted to exclude the unfavourable retroactive impact of the recent CRTC decision on wholesale wireless domestic roaming rates of $14 million.

 

BCE Supplementary Financial Information – First Quarter 2018 Page 8

 

Bell Wireline (1) (2) (3)

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

 Q1
2018		   Q1
2017		    

% change

  

Bell Wireline

              

Operating revenues

              

Data

 1,820   1,719     5.9 %

Voice

 950   981     (3.2 %)

Other services

 63   44     43.2 %

Total external service revenues

 2,833   2,744     3.2 %

Inter-segment service revenues

 59   49     20.4 %

Total operating service revenues

 2,892   2,793     3.5 %

Data

 104   99     5.1 %

Equipment and other

 88   85     3.5 %

Total external product revenues

 192   184     4.3 %

Inter-segment product revenues

 -   -     -  

Total operating product revenues

 192   184     4.3 %

Total external revenues

 3,025   2,928     3.3 %

Total operating revenues

 3,084   2,977     3.6 %

Operating costs

 (1,782 ) (1,714 )   (4.0 %)

Adjusted EBITDA

 1,302   1,263     3.1 %

Adjusted EBITDA margin

 42.2 % 42.4 %   (0.2 ) pts

Capital expenditures

747

 

691

 

 

(8.1

%)

Capital intensity

 24.2 % 23.2 %   (1.0 ) pts

High-speed Internet

              

High-speed Internet net activations

 19,647   14,989     31.1 %

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

 3,845,739   3,717,270     3.5 %

TV

              

Net subscriber (losses) activations

 (12,481 ) (15,663 )   20.3 %

Internet protocol television (IPTV)

 13,573   22,402     (39.4 %)

Total subscribers EOP(B)

 2,834,418   2,837,353     (0.1 %)

IPTV(B)

 1,578,489   1,465,007     7.7 %

Network access services (NAS)

              

Residential NAS(B)

 3,197,216   3,399,981     (6.0 %)

Residential NAS net losses

 (57,533 ) (73,421 )   21.6 %

 

(A) At the beginning of Q1 2018, we adjusted our high-speed Internet subscriber base to add 16,116 subscribers with a corresponding decrease to our postpaid wireless subscribers to reflect the transfer of fixed wireless Internet subscribers.
(B) At the beginning of Q1 2018, our high-speed Internet subscriber base was increased by 19,835, our IPTV by 14,599 and our residential NAS by 23,441, mainly as a result of a small acquisition made in the quarter.

 

BCE Supplementary Financial Information – First Quarter 2018 Page 9

 

Bell Wireline - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 18     TOTAL
2017		     Q4 17   Q3 17   Q2 17   Q1 17  

Bell Wireline

                            

Operating revenues

                            

Data

 1,820     7,192     1,844   1,817   1,812   1,719  

Voice

 950     3,968     973   994   1,020   981  

Other services

 63     211     60   52   55   44  

Total external service revenues

 2,833     11,371     2,877   2,863   2,887   2,744  

Inter-segment service revenues

 59     199     50   51   49   49  

Total operating service revenues

 2,892     11,570     2,927   2,914   2,936   2,793  

Data

 104     410     137   79   95   99  

Equipment and other

 88     419     154   95   85   85  

Total external product revenues

 192     829     291   174   180   184  

Inter-segment product revenues

 -     1     -   -   1   -  

Total operating product revenues

 192     830     291   174   181   184  

Total external revenues

 3,025     12,200     3,168   3,037   3,067   2,928  

Total operating revenues

 3,084     12,400     3,218   3,088   3,117   2,977  

Operating costs

 (1,782 )   (7,210 )   (1,906 ) (1,780 ) (1,810 ) (1,714 )

Adjusted EBITDA

 1,302     5,190     1,312   1,308   1,307   1,263  

Adjusted EBITDA margin

 42.2 %   41.9 %   40.8 % 42.4 % 41.9 % 42.4 %

Capital expenditures

 747     3,174     845   820   818   691  

Capital intensity

 24.2 %   25.6 %   26.3 % 26.6 % 26.2 % 23.2 %

High-speed Internet

                            

High-speed Internet net activations

 19,647     87,860     27,040   44,424   1,407   14,989  

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

 3,845,739     3,790,141     3,790,141   3,763,101   3,718,677   3,717,270  

TV

                            

Net subscriber (losses) activations

 (12,481 )   (20,716 )   6,546   1,738   (13,337 ) (15,663 )

IPTV

 13,573     107,712     32,484   36,399   16,427   22,402  

Total subscribers EOP(B)

 2,834,418     2,832,300     2,832,300   2,825,754   2,824,016   2,837,353  

IPTV(B)

 1,578,489     1,550,317     1,550,317   1,517,833   1,481,434   1,465,007  

Network access services (NAS)

                            

Residential NAS(B)

 3,197,216     3,231,308     3,231,308   3,275,589   3,332,976   3,399,981  

Residential NAS net losses

 (57,533 )   (242,094 )   (44,281 ) (57,387 ) (67,005 ) (73,421 )

 

(A) At the beginning of Q1 2018, we adjusted our high-speed Internet subscriber base to add 16,116 subscribers with a corresponding decrease to our postpaid wireless subscribers to reflect the transfer of fixed wireless Internet subscribers.
(B) At the beginning of Q1 2018, our high-speed Internet subscriber base was increased by 19,835, our IPTV by 14,599 and our residential NAS by 23,441, mainly as a result of a small acquisition made in the quarter.

 

BCE Supplementary Financial Information – First Quarter 2018 Page 10

 

BCE (2) (3)
Net debt and other information

BCE - Net debt and preferred shares

 

 

 

 

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

 

 

 

 

 

March 31
2018

 

December 31
2017

 

Debt due within one year

5,520

 

5,178

 

Long-term debt

19,347

 

18,215

 

Preferred shares - BCE (A)

2,002

 

2,002

 

Cash and cash equivalents

(1,199

)

(625

)

Net debt (4)

25,670

 

24,770

 

Net debt leverage ratio (4)

2.74

 

2.67

 

Adjusted EBITDA /net interest expense ratio (4)

9.22

 

9.23

 

         

 

Cash flow information

                

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

 Q1
2018		   Q1
2017		   $ change   % change  

Free cash flow (FCF) (4)

                

Cash flows from operating activities

 1,496   1,313   183   13.9 %

Capital expenditures

 (931 ) (852 ) (79 ) (9.3 %)

Dividends paid on preferred shares

 (33 ) (43 ) 10   23.3 %

Dividends paid by subsidiaries to non-controlling interest

 (13 ) (12 ) (1 ) (8.3 %)

Acquisition and other costs paid

 18   83   (65 ) (78.3 %)

FCF

 537   489   48   9.8 %
                 

 

Cash flow information - Historical trend

                        

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

 Q1
2018		   TOTAL
2017		   Q4
2017		   Q3
2017		   Q2
2017		   Q1
2017		  

FCF

                        

Cash flows from operating activities

 1,496   7,358   1,658   2,233   2,154   1,313  

Capital expenditures

 (931 ) (4,034 ) (1,100 ) (1,040 ) (1,042 ) (852 )

Dividends paid on preferred shares

 (33 ) (127 ) (33 ) (21 ) (30 ) (43 )

Dividends paid by subsidiaries to non-controlling interest

 (13 ) (34 ) -   (13 ) (9 ) (12 )

Acquisition and other costs paid

 18   155   27   24   21   83  

Voluntary defined benefit pension plan contribution

 -   100   100   -   -   -  

FCF

 537   3,418   652   1,183   1,094   489  
                         

 

(A) Net debt includes 50% of preferred shares

 

BCE Supplementary Financial Information – First Quarter 2018 Page 11

 

BCE (2) (3)
Consolidated Statements of Financial Position

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) March 31
2018		     December 31
2017		  

ASSETS

          

Current assets

          

Cash

 675     442  

Cash equivalents

 524     183  

Trade and other receivables

 2,938     3,129  

Inventory

 443     380  

Contract assets

 836     832  

Contract costs

 337     350  

Prepaid expenses

 344     217  

Other current assets

 169     122  

Total current assets

 6,266     5,655  

Non-current assets

          

Contract assets

 414     431  

Contract costs

 280     286  

Property, plant and equipment

 24,169     24,029  

Intangible assets

 13,410     13,258  

Deferred tax assets

 153     144  

Investments in associates and joint ventures

 829     814  

Other non-current assets

 584     757  

Goodwill

 10,543     10,428  

Total non-current assets

 50,382     50,147  

Total assets

 56,648     55,802  

LIABILITIES

          

Current liabilities

          

Trade payables and other liabilities

 3,534     3,875  

Contract liabilities

 706     693  

Interest payable

 176     168  

Dividends payable

 701     678  

Current tax liabilities

 49     140  

Debt due within one year

 5,520     5,178  

Total current liabilities

 10,686     10,732  

Non-current liabilities

          

Contract liabilities

 196     201  

Long-term debt

 19,347     18,215  

Deferred tax liabilities

 2,916     2,870  

Post-employment benefit obligations

 2,124     2,108  

Other non-current liabilities

 1,083     1,051  

Total non-current liabilities

 25,666     24,445  

Total liabilities

 36,352     35,177  

EQUITY

          

Equity attributable to BCE shareholders

          

Preferred shares

 4,004     4,004  

Common shares

 20,026     20,091  

Contributed surplus

 1,141     1,162  

Accumulated other comprehensive income (loss)

 9     (17 )

Deficit

 (5,192 )   (4,938 )

Total equity attributable to BCE shareholders

 19,988     20,302  

Non-controlling interest

 308     323  

Total equity

 20,296     20,625  

Total liabilities and equity

 56,648     55,802  

Number of common shares outstanding (millions)

 898.0     901.0  

 

BCE Supplementary Financial Information – First Quarter 2018 Page 12

 

BCE (2) (3)
Consolidated Cash Flow Data

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1
2018		   Q1
2017		     $ change  

Net earnings

 709   688     21  

Adjustments to reconcile net earnings to cash flows from operating activities

              

Severance, acquisition and other costs

 -   84     (84 )

Depreciation and amortization

 992   909     83  

Post-employment benefit plans cost

 90   68     22  

Net interest expense

 238   230     8  

Losses on investments

 -   12     (12 )

Income taxes

 235   250     (15 )

Contributions to post-employment benefit plans

 (87 ) (88 )   1  

Payments under other post-employment benefit plans

 (19 ) (19 )   -  

Severance and other costs paid

 (35 ) (41 )   6  

Interest paid

 (236 ) (223 )   (13 )

Income taxes paid (net of refunds)

 (284 ) (288 )   4  

Acquisition and other costs paid

 (18 ) (83 )   65  

Net change in operating assets and liabilities

 (89 ) (186 )   97  

Cash flows from operating activities

 1,496   1,313     183  

Capital expenditures

 (931 ) (852 )   (79 )

Cash dividends paid on preferred shares

 (33 ) (43 )   10  

Cash dividends paid by subsidiaries to non-controlling interest

 (13 ) (12 )   (1 )

Acquisition and other costs paid

 18   83     (65 )

Free cash flow

 537   489     48  

Business acquisitions

 (223 ) (1,635 )   1,412  

Acquisition and other costs paid

 (18 ) (83 )   65  

Acquisition of spectrum licences

 (36 ) -     (36 )

Disposition of intangibles and other assets

 68   -     68  

Other investing activities

 (35 ) (9 )   (26 )

(Decrease) increase in notes payable

 (57 ) 308     (365 )

Increase in securitized trade receivables

 -   350     (350 )

Issue of long-term debt

 1,466   1,496     (30 )

Repayment of long-term debt

 (173 ) (604 )   431  

Issue of common shares

 1   48     (47 )

Repurchase of common shares

 (175 ) -     (175 )

Repurchase of shares for settlement of share-based payments

 (88 ) (96 )   8  

Cash dividends paid on common shares

 (646 ) (594 )   (52 )

Return of capital to non-controlling interest

 (29 ) -     (29 )

Other financing activities

 (18 ) (13 )   (5 )

 

37   (832 )   869  

Net increase (decrease) in cash and cash equivalents

 574   (343 )   917  

Cash and cash equivalents at beginning of period

 625   853     (228 )

Cash and cash equivalents at end of period

 1,199   510     689  

 

BCE Supplementary Financial Information – First Quarter 2018 Page 13

 

BCE
Consolidated Cash Flow Data - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 18     TOTAL
2017		     Q4 17   Q3 17   Q2 17   Q1 17  

Net earnings

 709     3,050     698   850   814   688  

Adjustments to reconcile net earnings to cash flows from operating activities

                            

Severance, acquisition and other costs

 -     190     47   23   36   84  

Depreciation and amortization

 992     3,844     991   967   977   909  

Post-employment benefit plans cost

 90     314     82   82   82   68  

Net interest expense

 238     942     238   239   235   230  

Losses (gains) on investments

 -     5     (7 ) -   -   12  

Income taxes

 235     1,069     272   249   298   250  

Contributions to post-employment benefit plans

 (87 )   (413 )   (175 ) (64 ) (86 ) (88 )

Payments under other post-employment benefit plans

 (19 )   (77 )   (19 ) (20 ) (19 ) (19 )

Severance and other costs paid

 (35 )   (147 )   (36 ) (30 ) (40 ) (41 )

Interest paid

 (236 )   (965 )   (251 ) (242 ) (249 ) (223 )

Income taxes paid (net of refunds)

 (284 )   (675 )   (207 ) (66 ) (114 ) (288 )

Acquisition and other costs paid

 (18 )   (155 )   (27 ) (24 ) (21 ) (83 )

Net change in operating assets and liabilities

 (89 )   376     52   269   241   (186 )

Cash flows from operating activities

 1,496     7,358     1,658   2,233   2,154   1,313  

Capital expenditures

 (931 )   (4,034 )   (1,100 ) (1,040 ) (1,042 ) (852 )

Cash dividends paid on preferred shares

 (33 )   (127 )   (33 ) (21 ) (30 ) (43 )

Cash dividends paid by subsidiaries to non-controlling interest

 (13 )   (34 )   -   (13 ) (9 ) (12 )

Acquisition and other costs paid

 18     155     27   24   21   83  

Voluntary defined benefit pension plan contribution

 -     100     100   -   -   -  

Free cash flow

 537     3,418     652   1,183   1,094   489  

Business acquisitions

 (223 )   (1,649 )   (14 ) -   -   (1,635 )

Acquisition and other costs paid

 (18 )   (155 )   (27 ) (24 ) (21 ) (83 )

Voluntary defined benefit pension plan contribution

 -     (100 )   (100 ) -   -   -  

Acquisition of spectrum licences

 (36 )   -     -   -   -   -  

Disposition of intangibles and other assets

 68     323     -   -   323   -  

Other investing activities

 (35 )   (77 )   (26 ) (37 ) (5 ) (9 )

(Decrease) increase in notes payable

 (57 )   333     277   (379 ) 127   308  

(Decrease) increase in securitized trade receivables

 -     (10 )   -   -   (360 ) 350  

Issue of long-term debt

 1,466     3,011     -   1,515   -   1,496  

Repayment of long-term debt

 (173 )   (2,653 )   (1,435 ) (142 ) (472 ) (604 )

Issue of common shares

 1     117     24   4   41   48  

Repurchase of common shares

 (175 )   -     -   -   -   -  

Repurchase of shares for settlement of share-based payments

 (88 )   (224 )   (45 ) (38 ) (45 ) (96 )

Cash dividends paid on common shares

 (646 )   (2,512 )   (646 ) (646 ) (626 ) (594 )

Return of capital to non-controlling interest

 (29 )   -     -   -   -   -  

Other financing activities

 (18 )   (50 )   (14 ) (14 ) (9 ) (13 )

 

37     (3,646 )   (2,006 ) 239   (1,047 ) (832 )

Net increase (decrease) in cash and cash equivalents

 574     (228 )   (1,354 ) 1,422   47   (343 )

Cash and cash equivalents at beginning of period

 625     853     1,979   557   510   853  

Cash and cash equivalents at end of period

 1,199     625     625   1,979   557   510  

 

BCE Supplementary Financial Information – First Quarter 2018 Page 14

 

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. Bell means, as the context may require, either Bell Canada or, collectively, Bell Canada, its subsidiaries, joint arrangements and associates. MTS means, as the context may require, until March 17, 2017, either Manitoba Telecom Services Inc. or, collectively, Manitoba Telecom Services Inc. and its subsidiaries and Bell MTS means, from March 17, 2017, the combined operations of MTS and Bell Canada in Manitoba.
 
(2) As required by International Financial Reporting Standards (IFRS), effective January 1, 2018, we have adopted IFRS 15, Revenue from Contracts with Customers, retrospectively to each period in 2017 previously reported. For further details see note 3, Adoption of IFRS 15, of the Q1 2018 financial statements.
 
(3) On March 17, 2017, BCE acquired all of the issued and outstanding common shares of MTS. Bell MTS offers wireless, Internet, television (TV), phone services, security systems and information solutions including unified cloud and managed services to residential and business customers in Manitoba. The results from the acquired MTS operations are included in our Bell Wireline and Wireless segments. For further details see note 3 and note 4, Business acquisitions and dispositions, of the 2017 annual financial statements and the Q1 2018 financial statements, respectively.
 
(4) Non-GAAP Financial Measures

In Q1 2018, we updated our definition of adjusted net earnings and adjusted EPS to exclude net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans as they may affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Adjusted net earnings and adjusted EPS for 2017 have also been updated for comparability purposes.

Adjusted EBITDA and adjusted EBITDA margin

The terms adjusted EBITDA and adjusted EBITDA margin 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 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.
 

 

BCE Supplementary Financial Information - First Quarter 2017 Page 15

 

  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 mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net losses (gains) on investments, early debt redemption costs and impairment charges. 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 mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net losses (gains) on investments, early debt redemption costs and impairment charges, net of tax and non-controlling interest (NCI). 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.

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 NCI. We exclude acquisition and other costs paid and voluntary pension funding 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.

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.
 

 

BCE Supplementary Financial Information - First Quarter 2017 Page 16

 

  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.

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, plus 50% of declared preferred share dividends as shown in our income statements.
 
(5) 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.

Average revenue per user (ARPU) or subscriber is a measure used to track our recurring revenue streams, which has been updated to reflect the adoption of IFRS 15. Wireless blended ARPU is calculated by dividing certain service revenues by the average subscriber base for the specified period and is expressed as a dollar unit per month.

Average billing per user (ABPU) or subscriber approximates the average amount billed to customers on a monthly basis, which is used to track our recurring billing streams. This measure is the same as blended ARPU prior to the adoption of IFRS 15. Wireless blended ABPU is calculated by dividing certain customer billings by the average subscriber base for the specified period and is expressed as a dollar unit per month.

Capital intensity is capital expenditures divided by operating revenues.

Churn is the rate at which existing subscribers cancel their services. It is a measure of our ability to retain our customers. Wireless churn is calculated by dividing the number of deactivations during a given period by the average number of subscribers in the base for the specified period and is expressed as a percentage per month.

Wireless subscriber unit is comprised of an active revenue-generating unit (e.g. mobile device, tablet or wireless Internet products), with a unique identifier (typically International Mobile Equipment Identity (IMEI) number), that has access to our wireless networks. We report wireless subscriber units in two categories: postpaid and prepaid. Prepaid subscriber units are considered active for a period of 120 days following the expiry of the subscriber’s prepaid balance.

Wireline subscriber unit consists of an active revenue-generating unit with access to our services, including Internet, satellite TV, IPTV, and/or NAS. A subscriber is included in our subscriber base when the service has been installed and is operational at the customer premise and a billing relationship has been established.

  • Internet, IPTV and satellite TV subscribers have access to stand-alone services, and are primarily represented by a dwelling unit
  • NAS subscribers are based on a line count and are represented by a unique telephone number

 

BCE Supplementary Financial Information - First Quarter 2017 Page 17