TMCnet News
/FIRST AND FINAL ADD - MO239 - BCE reports 2005 results/Q4 2005 Q4 2004 2005 2004 ------------------------------------------------------------------------- Cash from operating activities 1,585 1,279 5,559 5,443 Capital expenditures (831) (1,043) (3,428) (3,319) Total dividends paid (363) (347) (1,473) (1,381) Other investing activities 32 (10) 4 127 ------------------------------------------------------------------------- Free cash flow 423 (121) 662 870 Restructuring and other items 23 126 55 1,224 ------------------------------------------------------------------------- Free cash flow before restructuring and other items 446 5 717 2,094 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplementary Financial Information BCE Consolidated (1) Consolidated Operational Data ($ millions, except per share Q4 Q4 $ % Total Total $ % amounts) 2005 2004 change change 2005 2004 change change ------------------------------------------------------------------------- Operating revenues 4,986 4,769 217 4.6% 19,105 18,368 737 4.0% Operating expenses (3,128) (2,975) (153) (5.1%) (11,508)(10,938) (570) (5.2%) ------------------------------------------------------------------------- EBITDA(2) 1,858 1,794 64 3.6% 7,597 7,430 167 2.2% EBITDA margin(3) 37.3% 37.6% (0.3)pts 39.8% 40.5% (0.7)pts Amortization expense (791) (787) (4) (0.5%) (3,114) (3,056) (58) (1.9%) Net benefit plans cost (65) (67) 2 3.0% (380) (256) (124) (48.4%) Restructuring and other items (23) (126) 103 81.7% (55) (1,224) 1,169 95.5% ------------------------------------------------------------------------- Operating income 979 814 165 20.3% 4,048 2,894 1,154 39.9% Other income (17) 17 (34) n.m. 8 407 (399) (98.0%) Interest expense (246) (244) (2) (0.8%) (981) (999) 18 1.8% ------------------------------------------------------------------------- Pre-tax earnings from continuing operations 716 587 129 22.0% 3,075 2,302 773 33.6% Income taxes (224) (193) (31)(16.1%) (893) (681) (212) (31.1%) Non-controlling interest (74) (40) (34)(85.0%) (267) (174) (93) (53.4%) ------------------------------------------------------------------------- Earnings from continuing operations 418 354 64 18.1% 1,915 1,447 468 32.3% Discontinued operations 12 11 1 9.1% 46 77 (31) (40.3%) ------------------------------------------------------------------------- Net earnings before extraordinary gain 430 365 65 17.8% 1,961 1,524 437 28.7% Extraordinary gain - 69 (69)(100.0%) - 69 (69)(100.0%) ------------------------------------------------------------------------- Net earnings 430 434 (4) (0.9%) 1,961 1,593 368 23.1% Dividends on preferred shares (17) (17) - 0.0% (70) (70) - 0.0% ------------------------------------------------------------------------- Net earnings applicable to common shares 413 417 (4) (1.0%) 1,891 1,523 368 24.2% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings per common share - basic Continuing opera- tions $ 0.43 $ 0.37 $ 0.06 16.2% $ 1.99 $ 1.49 $ 0.50 33.6% Discon- tinued opera- tions $ 0.01 $ 0.01 $ - 0.0% $ 0.05 $ 0.09 $(0.04) (44.4%) Extraordinary gain $ - $ 0.07 $(0.07)(100.0%) $ - $ 0.07 $(0.07)(100.0%) Net earnings $ 0.44 $ 0.45 $(0.01) (2.2%) $ 2.04 $ 1.65 $ 0.39 23.6% Net earnings per common share - diluted Continuing opera- tions $ 0.43 $ 0.37 $ 0.06 16.2% $ 1.99 $ 1.49 $ 0.50 33.6% Discon- tinued opera- tions $ 0.01 $ 0.01 $ - 0.0% $ 0.05 $ 0.09 $(0.04) (44.4%) Extraordinary gain $ - $ 0.07 $(0.07)(100.0%) $ - $ 0.07 $(0.07)(100.0%) Net earnings $ 0.44 $ 0.45 $(0.01) (2.2%) $ 2.04 $ 1.65 $ 0.39 23.6% Dividends per common share $ 0.33 $ 0.30 $ 0.03 10.0% $ 1.32 $ 1.20 $ 0.12 10.0% Average number of common shares outstanding - basic (millions) 927.3 925.3 926.8 924.6 ------------------------------------------------------------------------- ------------------------------------------------------------------------- The following items are included in net earnings: Net gains (losses) on investments Continuing opera- tions - 64 29 389 Discon- tinued opera- tions - (2) (1) 34 Restructuring and other items (16) (62) (38) (772) ------------------------------------------------------------------------- Total (16) - (10) (349) Impact on net earnings per share $(0.02) $ - $(0.01) $(0.37) ------------------------------------------------------------------------- EPS before net gains (losses) on investments and restructuring and other items(2) $ 0.46 $ 0.45 $ 0.01 2.2% $ 2.05 $ 2.02 $ 0.03 1.5% ------------------------------------------------------------------------- ------------------------------------------------------------------------- n.m.: not meaningful BCE Consolidated (1) Consolidated Operational Data - Historical Trend ($ millions, except Total per share amounts) 2005 Q4 05 Q3 05 Q2 05 Q1 05 ------------------------------------------------------------------------- Operating revenues 19,105 4,986 4,732 4,757 4,630 Operating expenses (11,508) (3,128) (2,868) (2,785) (2,727) ------------------------------------------------------------------------- EBITDA(2) 7,597 1,858 1,864 1,972 1,903 EBITDA margin(3) 39.8% 37.3% 39.4% 41.5% 41.1% Amortization expense (3,114) (791) (786) (776) (761) Net benefit plans cost (380) (65) (108) (104) (103) Restructuring and other items (55) (23) (31) (5) 4 ------------------------------------------------------------------------- Operating income 4,048 979 939 1,087 1,043 Other income 8 (17) (2) 19 8 Interest expense (981) (246) (245) (245) (245) ------------------------------------------------------------------------- Pre-tax earnings from continuing operations 3,075 716 692 861 806 Income taxes (893) (224) (187) (218) (264) Non-controlling interest (267) (74) (57) (73) (63) ------------------------------------------------------------------------- Earnings from continuing operations 1,915 418 448 570 479 Discontinued operations 46 12 11 11 12 ------------------------------------------------------------------------- Net earnings before extraordinary gain 1,961 430 459 581 491 Extraordinary gain - - - - - ------------------------------------------------------------------------- Net earnings 1,961 430 459 581 491 Dividends on preferred shares (70) (17) (18) (18) (17) ------------------------------------------------------------------------- Net earnings applicable to common shares 1,891 413 441 563 474 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings per common share - basic Continuing operations $ 1.99 $ 0.43 $ 0.46 $ 0.60 $ 0.50 Discontinued operations $ 0.05 $ 0.01 $ 0.02 $ 0.01 $ 0.01 Extraordinary gain $ - $ - $ - $ - $ - Net earnings $ 2.04 $ 0.44 $ 0.48 $ 0.61 $ 0.51 Net earnings per common share - diluted Continuing operations $ 1.99 $ 0.43 $ 0.46 $ 0.60 $ 0.50 Discontinued operations $ 0.05 $ 0.01 $ 0.02 $ 0.01 $ 0.01 Extraordinary gain $ - $ - $ - $ - $ - Net earnings $ 2.04 $ 0.44 $ 0.48 $ 0.61 $ 0.51 Dividends per common share $ 1.32 $ 0.33 $ 0.33 $ 0.33 $ 0.33 Average number of common shares outstanding - basic (millions) 926.8 927.3 927.0 926.6 926.2 ------------------------------------------------------------------------- ------------------------------------------------------------------------- The following items are included in net earnings: Net gains (losses) on investments Continuing operations 29 - - 28 1 Discontinued operations (1) - - - (1) Restructuring and other items (38) (16) (21) (3) 2 ------------------------------------------------------------------------- Total (10) (16) (21) 25 2 Impact on net earnings per share $(0.01) $(0.02) $(0.02) $0.03 $ - ------------------------------------------------------------------------- EPS before net gains (losses) on investments and restructuring and other items(2) $ 2.05 $ 0.46 $ 0.50 $ 0.58 $ 0.51 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ($ millions, except Total per share amounts) 2004 Q4 04 Q3 04 Q2 04 Q1 04 ------------------------------------------------------------------------- Operating revenues 18,368 4,769 4,556 4,577 4,466 Operating expenses (10,938) (2,975) (2,655) (2,657) (2,651) ------------------------------------------------------------------------- EBITDA(2) 7,430 1,794 1,901 1,920 1,815 EBITDA margin(3) 40.5% 37.6% 41.7% 41.9% 40.6% Amortization expense (3,056) (787) (754) (757) (758) Net benefit plans cost (256) (67) (61) (65) (63) Restructuring and other items (1,224) (126) (1,081) (14) (3) ------------------------------------------------------------------------- Operating income 2,894 814 5 1,084 991 Other income 407 17 332 23 35 Interest expense (999) (244) (252) (253) (250) ------------------------------------------------------------------------- Pre-tax earnings from continuing operations 2,302 587 85 854 776 Income taxes (681) (193) 52 (286) (254) Non-controlling interest (174) (40) (47) (39) (48) ------------------------------------------------------------------------- Earnings from continuing operations 1,447 354 90 529 474 Discontinued operations 77 11 10 42 14 ------------------------------------------------------------------------- Net earnings before extraordinary gain 1,524 365 100 571 488 Extraordinary gain 69 69 - - - ------------------------------------------------------------------------- Net earnings 1,593 434 100 571 488 Dividends on preferred shares (70) (17) (18) (17) (18) ------------------------------------------------------------------------- Net earnings applicable to common shares 1,523 417 82 554 470 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings per common share - basic Continuing operations $ 1.49 $ 0.37 $ 0.08 $ 0.55 $ 0.49 Discontinued operations $ 0.09 $ 0.01 $ 0.01 $ 0.05 $ 0.02 Extraordinary gain $ 0.07 $ 0.07 $ - $ - $ - Net earnings $ 1.65 $ 0.45 $ 0.09 $ 0.60 $ 0.51 Net earnings per common share - diluted Continuing operations $ 1.49 $ 0.37 $ 0.08 $ 0.55 $ 0.49 Discontinued operations $ 0.09 $ 0.01 $ 0.01 $ 0.05 $ 0.02 Extraordinary gain $ 0.07 $ 0.07 $ - $ - $ - Net earnings $ 1.65 $ 0.45 $ 0.09 $ 0.60 $ 0.51 Dividends per common share $ 1.20 $ 0.30 $ 0.30 $ 0.30 $ 0.30 Average number of common shares outstanding - basic (millions) 924.6 925.3 924.6 924.3 924.1 ------------------------------------------------------------------------- ------------------------------------------------------------------------- The following items are included in net earnings: Net gains (losses) on investments Continuing operations 389 64 325 - - Discontinued operations 34 (2) (2) 31 7 Restructuring and other items (772) (62) (725) 16 (1) ------------------------------------------------------------------------- Total (349) - (402) 47 6 Impact on net earnings per share $(0.37) $ - $(0.43) $ 0.05 $ 0.01 ------------------------------------------------------------------------- EPS before net gains (losses) on investments and restructuring and other items(2) $ 2.02 $ 0.45 $ 0.52 $ 0.55 $ 0.50 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BCE Consolidated(1) Segmented Data ($ millions, except where otherwise Q4 Q4 $ % Total Total $ % indicated) 2005 2004 change change 2005 2004 change change ------------------------------------------------------------------------- Revenues Residential 1,924 1,911 13 0.7% 7,599 7,502 97 1.3% Business 1,627 1,535 92 6.0% 6,120 5,851 269 4.6% Aliant 535 506 29 5.7% 2,097 2,033 64 3.1% Other Bell Canada 494 511 (17) (3.3) 1,958 1,939 19 1.0% Inter- segment eliminations (123) (160) 37 23.1% (524) (538) 14 2.6% ------------------------------------------------------------------------- Total Bell Canada 4,457 4,303 154 3.6% 17,250 16,787 463 2.8% Other BCE Bell Globemedia 465 405 60 14.8% 1,555 1,420 135 9.5% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Advertising 354 306 48 15.7% 1,148 1,041 107 10.3% Subscriber 86 77 9 11.7% 320 298 22 7.4% Production and Sundry 25 22 3 13.6% 87 81 6 7.4% ------------------------------------------------------------------------- Telesat 118 102 16 15.7% 475 362 113 31.2% Other 13 19 (6) (31.6%) 63 60 3 5.0% ------------------------------------------------------------------------- Total Other BCE 596 526 70 13.3% 2,093 1,842 251 13.6% Inter-segment eliminations (67) (60) (7) (11.7%) (238) (261) 23 8.8% ------------------------------------------------------------------------- Total revenues 4,986 4,769 217 4.6% 19,105 18,368 737 4.0% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operating income Residential 444 464 (20) (4.3%) 2,001 2,119 (118)(5.6%) Business 236 183 53 29.0% 910 896 14 1.6% Aliant 105 23 82 n.m. 396 268 128 47.8% Other Bell Canada 99 61 38 62.3% 448 (588) 1,036 n.m. ------------------------------------------------------------------------- Total Bell Canada 884 731 153 20.9% 3,755 2,695 1,060 39.3% Other BCE Bell Globemedia 101 103 (2) (1.9%) 289 240 49 20.4% Telesat 34 37 (3) (8.1%) 157 141 16 11.3% Other (40) (57) 17 29.8% (153) (182) 29 15.9% ------------------------------------------------------------------------- Total Other BCE 95 83 12 14.5% 293 199 94 47.2% ------------------------------------------------------------------------- Total operating income 979 814 165 20.3% 4,048 2,894 1,154 39.9% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures(4) Residential 350 418 68 16.3% 1,519 1,371 (148)(10.8%) Business 206 330 124 37.6% 897 1,008 111 11.0% Aliant 77 114 37 32.5% 363 295 (68)(23.1%) Other Bell Canada 103 123 20 16.3% 343 352 9 2.6% ------------------------------------------------------------------------- Total Bell Canada 736 985 249 25.3% 3,122 3,026 (96)(3.2%) Other BCE Telesat 62 40 (22) (55.0%) 260 257 (3)(1.2%) Other 33 18 (15) (83.3%) 46 36 (10)(27.8%) ------------------------------------------------------------------------- Total capital expenditures 831 1,043 212 20.3% 3,428 3,319 (109)(3.3%) ------------------------------------------------------------------------- ------------------------------------------------------------------------- n.m.: not meaningful BCE Consolidated(1) Segmented Data - Historical Trend ($ millions, except where otherwise Total indicated) 2005 Q4 05 Q3 05 Q2 05 Q1 05 ------------------------------------------------------------------------- Revenues Residential 7,599 1,924 1,929 1,890 1,856 Business 6,120 1,627 1,516 1,499 1,478 Aliant 2,097 535 520 518 524 Other Bell Canada 1,958 494 500 485 479 Inter-segment eliminations (524) (123) (139) (134) (128) ------------------------------------------------------------------------- Total Bell Canada 17,250 4,457 4,326 4,258 4,209 Other BCE Bell Globemedia 1,555 465 335 399 356 ------------------------------------------------------------------------- Advertising 1,148 354 233 300 261 Subscriber 320 86 79 78 77 Production and Sundry 87 25 23 21 18 ------------------------------------------------------------------------- Telesat 475 118 112 137 108 Other 63 13 15 24 11 ------------------------------------------------------------------------- Total Other BCE 2,093 596 462 560 475 Inter-segment eliminations (238) (67) (56) (61) (54) ------------------------------------------------------------------------- Total revenues 19,105 4,986 4,732 4,757 4,630 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operating income Residential 2,001 444 479 552 526 Business 910 236 213 221 240 Aliant 396 105 105 99 87 Other Bell Canada 448 99 111 109 129 ------------------------------------------------------------------------- Total Bell Canada 3,755 884 908 981 982 Other BCE Bell Globemedia 289 101 29 95 64 Telesat 157 34 43 43 37 Other (153) (40) (41) (32) (40) ------------------------------------------------------------------------- Total Other BCE 293 95 31 106 61 ------------------------------------------------------------------------- Total operating income 4,048 979 939 1,087 1,043 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures(4) Residential 1,519 350 434 394 341 Business 897 206 249 246 196 Aliant 363 77 100 104 82 Other Bell Canada 343 103 90 103 47 ------------------------------------------------------------------------- Total Bell Canada 3,122 736 873 847 666 Other BCE Telesat 260 62 91 53 54 Other 46 33 4 5 4 ------------------------------------------------------------------------- Total capital expenditures 3,428 831 968 905 724 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BCE Consolidated(1) Segmented Data - Historical Trend ($ millions, except where otherwise Total indicated) 2004 Q4 04 Q3 04 Q2 04 Q1 04 ------------------------------------------------------------------------- Revenues Residential 7,502 1,911 1,908 1,858 1,825 Business 5,851 1,535 1,440 1,441 1,435 Aliant 2,033 506 497 526 504 Other Bell Canada 1,939 511 486 468 474 Inter-segment eliminations (538) (160) (125) (121) (132) ------------------------------------------------------------------------- Total Bell Canada 16,787 4,303 4,206 4,172 4,106 Other BCE Bell Globemedia 1,420 405 302 371 342 ------------------------------------------------------------------------- Advertising 1,041 306 209 277 249 Subscriber 298 77 73 74 74 Production and Sundry 81 22 20 20 19 ------------------------------------------------------------------------- Telesat 362 102 91 85 84 Other 60 19 12 19 10 ------------------------------------------------------------------------- Total Other BCE 1,842 526 405 475 436 Inter-segment eliminations (261) (60) (55) (70) (76) ------------------------------------------------------------------------- Total revenues 18,368 4,769 4,556 4,577 4,466 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operating income Residential 2,119 464 569 560 526 Business 896 183 245 227 241 Aliant 268 23 71 92 82 Other Bell Canada (588) 61 (898) 138 111 ------------------------------------------------------------------------- Total Bell Canada 2,695 731 (13) 1,017 960 Other BCE Bell Globemedia 240 103 23 74 40 Telesat 141 37 39 34 31 Other (182) (57) (44) (41) (40) ------------------------------------------------------------------------- Total Other BCE 199 83 18 67 31 ------------------------------------------------------------------------- Total operating income 2,894 814 5 1,084 991 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures(4) Residential 1,371 418 377 331 245 Business 1,008 330 183 281 214 Aliant 295 114 51 45 85 Other Bell Canada 352 123 125 58 46 ------------------------------------------------------------------------- Total Bell Canada 3,026 985 736 715 590 Other BCE Telesat 257 40 64 88 65 Other 36 18 5 9 4 ------------------------------------------------------------------------- Total capital expenditures 3,319 1,043 805 812 659 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BCE Consolidated(1) Consolidated Balance Sheet Data ($ millions, except where December September June March December otherwise 31 30 30 31 31 indicated) 2005 2005 2005 2005 2004 ------------------------------------------------------------------------- ASSETS Current assets Cash and cash equivalents 363 415 332 482 313 Accounts receivable 1,766 1,806 1,728 1,914 1,951 Other current assets 1,142 1,333 1,060 1,205 1,061 Current assets of discontinued operations 402 378 369 368 383 ------------------------------------------------------------------------- Total current assets 3,673 3,932 3,489 3,969 3,708 Capital assets 22,062 21,941 21,761 21,087 21,104 Other long-term assets 2,914 2,667 2,667 2,720 2,628 Indefinite-life intangible assets 3,031 2,973 2,973 2,951 2,916 Goodwill 7,887 7,900 7,854 7,814 7,756 Non-current assets of discontinued operations 1,063 1,073 1,070 1,034 1,028 ------------------------------------------------------------------------- Total assets 40,630 40,486 39,814 39,575 39,140 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES Current liabilities Accounts payable and accrued liabilities 3,435 3,287 3,060 3,052 3,444 Interest payable 182 266 189 283 183 Dividends payable 343 325 325 325 297 Debt due within one year 1,373 1,260 1,494 1,423 1,272 Current liabilities of discontinued operations 281 279 280 272 271 ------------------------------------------------------------------------- Total current liabilities 5,614 5,417 5,348 5,355 5,467 Long-term debt 12,119 12,558 12,407 12,185 11,685 Other long-term liabilities 5,028 4,758 4,506 4,718 4,834 Non-current liabilities of discontinued operations 250 251 170 195 222 ------------------------------------------------------------------------- Total liabilities 23,011 22,984 22,431 22,453 22,208 ------------------------------------------------------------------------- Non-controlling interest 2,898 2,892 2,905 2,914 2,908 ------------------------------------------------------------------------- ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Preferred shares 1,670 1,670 1,670 1,670 1,670 ------------------------------------------------------------------------- Common shareholders' equity Common shares 16,806 16,806 16,794 16,790 16,781 Contributed surplus 1,081 1,076 1,071 1,065 1,061 Deficit (4,763) (4,871) (5,005) (5,264) (5,432) Currency translation adjustment (73) (71) (52) (53) (56) ------------------------------------------------------------------------- Total common shareholders' equity 13,051 12,940 12,808 12,538 12,354 ------------------------------------------------------------------------- Total shareholders' equity 14,721 14,610 14,478 14,208 14,024 ------------------------------------------------------------------------- Total liabilities and shareholders' equity 40,630 40,486 39,814 39,575 39,140 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Number of common shares outstanding 927.3 927.3 926.7 926.4 925.9 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total Net Debt 13,129 13,403 13,569 13,126 12,644 Total Capitalization 30,748 30,905 30,952 30,248 29,576 Key ratios Net debt: Total Capitalization 42.7% 43.4% 43.8% 43.4% 42.8% Net debt: Trailing 12 month EBITDA 1.73 1.78 1.79 1.75 1.70 EBITDA: Interest (trailing 12 month) 7.74 7.69 7.68 7.56 7.44 BCE Consolidated Consolidated Cash Flow Data ($ millions, except where otherwise Q4 Q4 Total Total indicated) 2005 2004 $ change 2005 2004 $ change ------------------------------------------------------------------------- Cash flows from operating activities Earnings from continuing operations 418 354 64 1,915 1,447 468 Adjustments to reconcile earnings from continuing operations to cash flows from operating activities: Amortization expense 791 787 4 3,114 3,056 58 Net benefit plans cost 65 67 (2) 380 256 124 Restructuring and other items 23 126 (103) 55 1,224 (1,169) Net gains on investments 1 12 (11) (33) (320) 287 Future income taxes 465 62 403 746 (35) 781 Non-controlling interest 74 40 34 267 174 93 Contributions to employee pension plans (65) (24) (41) (226) (112) (114) Other employee future benefit plan payments (24) (22) (2) (93) (81) (12) Payments of restructuring and other items (23) (214) 191 (176) (253) 77 Operating assets and liabilities (140) 91 (231) (390) 87 (477) ------------------------------------------------------------------------- 1,585 1,279 306 5,559 5,443 116 ------------------------------------------------------------------------- Capital expenditures (831) (1,043) 212 (3,428) (3,319) (109) Other investing activities 32 (10) 42 4 127 (123) Cash dividends paid on preferred shares (22) (21) (1) (86) (85) (1) Cash dividends paid by subsidiaries to non-controlling interest (35) (49) 14 (192) (188) (4) ------------------------------------------------------------------------- Free Cash Flow from operations, before common dividends(2) 729 156 573 1,857 1,978 (121) Cash dividends paid on common shares (306) (277) (29) (1,195) (1,108) (87) ------------------------------------------------------------------------- Free Cash Flow from operations, after common dividends(2) 423 (121) 544 662 870 (208) Business acquisitions (50) (334) 284 (228) (1,118) 890 Business dispositions - - - - 20 (20) Increase in investments (17) (38) 21 (233) (58) (175) Decrease in investments 12 - 12 19 713 (694) ------------------------------------------------------------------------- Free Cash Flow after investments and divestitures 368 (493) 861 220 427 (207) ------------------------------------------------------------------------- Other financing activities Increase (decrease) in notes payable and bank advances (187) 7 (194) (66) 130 (196) Issue of long-term debt - 56 (56) 1,190 1,306 (116) Repayment of long-term debt (196) (580) 384 (1,178) (2,256) 1,078 Issue of common shares - 16 (16) 25 32 (7) Issue of equity securities by subsidiaries to non-controlling interest - 1 (1) 1 8 (7) Redemption of equity securities by subsidiaries from non-controlling interest (18) - (18) (78) (58) (20) Other financing activities (19) (18) (1) (64) (81) 17 ------------------------------------------------------------------------- (420) (518) 98 (170) (919) 749 ------------------------------------------------------------------------- Cash provided by (used in) continuing operations (52) (1,011) 959 50 (492) 542 Cash provided by (used in) discontinued operations 22 5 17 15 150 (135) ------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (30) (1,006) 976 65 (342) 407 Cash and cash equivalents at beginning of period 475 1,386 (911) 380 722 (342) ------------------------------------------------------------------------- Cash and cash equivalents at end of period 445 380 65 445 380 65 ------------------------------------------------------------------------- Consists of: Cash and cash equivalents of continuing operations 363 313 50 363 313 50 Cash and cash equivalents of discontinued operations 82 67 15 82 67 15 ------------------------------------------------------------------------- Total 445 380 65 445 380 65 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other information Capital expenditures as a percentage of revenues 16.7% 21.9% 5.2pts 17.9% 18.1% 0.2 pts Cash flow per share(5) $0.81 $0.26 $0.55 $2.30 $2.30 $0.00 Annualized cash flow yield(6) 11.3% 2.3% 9.0pts 7.2% 7.4% (0.2)pts Common dividend payout 74.1% 66.4% 7.7pts 63.2% 72.8% (9.6)pts BCE Consolidated Consolidated Cash Flow Data - Historical Trend ($ millions, except where Total otherwise indicated) 2005 Q4 05 Q3 05 Q2 05 Q1 05 ------------------------------------------------------------------------- Cash flows from operating activities Earnings from continuing operations 1,915 418 448 570 479 Adjustments to reconcile earnings from continuing operations to cash flows from operating activities: Amortization expense 3,114 791 786 776 761 Net benefit plans cost 380 65 108 104 103 Restructuring and other items 55 23 31 5 (4) Net (gains) losses on investments (33) 1 - (32) (2) Future income taxes 746 465 111 63 107 Non-controlling interest 267 74 57 73 63 Contributions to employee pension plans (226) (65) (33) (34) (94) Other employee future benefit plan payments (93) (24) (24) (22) (23) Payments of restructuring and other items (176) (23) (24) (28) (101) Operating assets and liabilities (390) (140) 195 (72) (373) ------------------------------------------------------------------------- 5,559 1,585 1,655 1,403 916 ------------------------------------------------------------------------- Capital expenditures (3,428) (831) (968) (905) (724) Other investing activities 4 32 (3) (10) (15) Cash dividends paid on preferred shares (86) (22) (21) (22) (21) Cash dividends paid by subsidiaries to non-controlling interest (192) (35) (47) (60) (50) ------------------------------------------------------------------------- Free Cash Flow from operations, before common dividends(2) 1,857 729 616 406 106 Cash dividends paid on common shares (1,195) (306) (306) (305) (278) ------------------------------------------------------------------------- Free Cash Flow from operations, after common dividends(2) 662 423 310 101 (172) Business acquisitions (228) (50) (56) (35) (87) Business dispositions - - - - - Increase in investments (233) (17) (75) (13) (128) Decrease in investments 19 12 - 5 2 ------------------------------------------------------------------------- Free Cash Flow after investments and divestitures 220 368 179 58 (385) ------------------------------------------------------------------------- Other financing activities Increase (decrease) in notes payable and bank advances (66) (187) (65) 341 (155) Issue of long-term debt 1,190 - 200 205 785 Repayment of long-term debt (1,178) (196) (209) (719) (54) Issue of common shares 25 - 12 4 9 Issue of equity securities and convertible debentures by subsidiaries to non-controlling interest 1 - 1 - - Redemption of equity securities by subsidiaries from non-controlling interest (78) (18) (22) (21) (17) Other financing activities (64) (19) (13) (18) (14) ------------------------------------------------------------------------- (170) (420) (96) (208) 554 ------------------------------------------------------------------------- Cash provided by (used in) continuing operations 50 (52) 83 (150) 169 Cash provided by (used in) discontinued operations 15 22 12 4 (23) ------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 65 (30) 95 (146) 146 Cash and cash equivalents at beginning of period 380 475 380 526 380 ------------------------------------------------------------------------- Cash and cash equivalents at end of period 445 445 475 380 526 ------------------------------------------------------------------------- Consists of: Cash and cash equivalents of continuing operations 363 363 415 332 482 Cash and cash equivalents of discontinued operations 82 82 60 48 44 ------------------------------------------------------------------------- Total 445 445 475 380 526 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other information Capital expenditures as a percentage of revenues 17.9% 16.7% 20.5% 19.0% 15.6% Cash flow per share(5) $2.30 $0.81 $0.74 $0.54 $0.21 Annualized cash flow yield(6) 7.2% 11.3% 8.3% 6.0% 1.5% Common dividend payout 63.2% 74.1% 69.4% 54.2% 58.6% ($ millions, except where Total otherwise indicated) 2004 Q4 04 Q3 04 Q2 04 Q1 04 ------------------------------------------------------------------------- Cash flows from operating activities Earnings from continuing operations 1,447 354 90 529 474 Adjustments to reconcile earnings from continuing operations to cash flows from operating activities: Amortization expense 3,056 787 754 757 758 Net benefit plans cost 256 67 61 65 63 Restructuring and other items 1,224 126 1,081 14 3 Net (gains) losses on investments (320) 12 (327) - (5) Future income taxes (35) 62 (184) 34 53 Non-controlling interest 174 40 47 39 48 Contributions to employee pension plans (112) (24) (32) (27) (29) Other employee future benefit plan payments (81) (22) (13) (22) (24) Payments of restructuring and other items (253) (214) (12) (8) (19) Operating assets and liabilities 87 91 368 (284) (88) ------------------------------------------------------------------------- 5,443 1,279 1,833 1,097 1,234 ------------------------------------------------------------------------- Capital expenditures (3,319) (1,043) (805) (812) (659) Other investing activities 127 (10) (2) 120 19 Cash dividends paid on preferred shares (85) (21) (21) (21) (22) Cash dividends paid by subsidiaries to non-controlling interest (188) (49) 44) (52) (43) ------------------------------------------------------------------------- Free Cash Flow from operations, before common dividends(2) 1,978 156 961 332 529 Cash dividends paid on common shares (1,108) (277) (277) (277) (277) ------------------------------------------------------------------------- Free Cash Flow from operations, after common dividends(2) 870 (121) 684 55 252 Business acquisitions (1,118) (334) (646) (79) (59) Business dispositions 20 - 4 - 16 Increase in investments (58) (38) (12) (8) - Decrease in investments 713 - 707 - 6 ------------------------------------------------------------------------- Free Cash Flow after investments and divestitures 427 (493) 737 (32) 215 ------------------------------------------------------------------------- Other financing activities Increase (decrease) in notes payable and bank advances 130 7 173 (69) 19 Issue of long-term debt 1,306 56 11 1 1,238 Repayment of long-term debt (2,256) (580) (98) (714) (864) Issue of common shares 32 16 8 4 4 Issue of equity securities and convertible debentures by subsidiaries to non-controlling interest 8 1 - - 7 Redemption of equity securities by subsidiaries from non-controlling interest (58) - (4) (12) (42) Other financing activities (81) (18) (18) 3 (48) ------------------------------------------------------------------------- (919) (518) 72 (787) 314 ------------------------------------------------------------------------- Cash provided by (used in) continuing operations (492) (1,011) 809 (819) 529 Cash provided by (used in) discontinued operations 150 5 - (115) 260 ------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (342) (1,006) 809 (934) 789 Cash and cash equivalents at beginning of period 722 1,386 577 1,511 722 ------------------------------------------------------------------------- Cash and cash equivalents at end of period 380 380 1,386 577 1,511 ------------------------------------------------------------------------- Consists of: Cash and cash equivalents of continuing operations 313 313 1,327 521 1,085 Cash and cash equivalents of discontinued operations 67 67 59 56 426 ------------------------------------------------------------------------- Total 380 380 1,386 577 1,511 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other information Capital expenditures as a percentage of revenues 18.1% 21.9% 17.7% 17.7% 14.8% Cash flow per share(5) $2.30 $0.26 $1.11 $0.31 $0.62 Annualized cash flow yield(6) 7.4% 2.3% 15.3% 5.4% 8.3% Common dividend payout 72.8% 66.4% 337.8% 50.0% 58.9% Proportionate Net Debt, Preferreds and EBITDA BCE Corporate and Bell Canada Net debt and preferreds At December 31, 2005 ($ millions, Bell Bell Inter- except where Canada Canada company Total BCE Inc. otherwise (excl. Statu- elimi- Bell Corpo- indicated) Aliant) Aliant tory nations Canada rate -------------------------------------------------------------- --------- Cash and cash equivalents (38) (195) (233) (233) 3 Long-term debt 9,279 898 10,177 (339) 9,838 1,700 Debt due within one year 818 18 836 (96) 740 300 Long-term note receivable from BCH (498) - (498) 498 - - PPA fair value increment(7) 99 - -------------------------------------------------------------- --------- Net debt 9,561 721 10,282 63 10,444 2,003 Preferred shares - Bell Canada(8) 1,100 1,100 1,100 - Preferred shares - Aliant(8) 172 172 172 - Perpetual Preferred shares - BCE - - - - 1,670 Nortel common shares at market - - - - (52) -------------------------------------------------------------- --------- Net debt and preferreds 10,661 893 11,554 63 11,716 3,621 -------------------------------------------------------------- --------- -------------------------------------------------------------- --------- Proportionate net debt and preferreds, Trailing EBITDA For the quarter ended December 31, 2005 Propor- ($ millions, tionate Total EBITDA except where net debt otherwise % and indicated) owned pre- Trai- by BCE ferreds Q4 05 Q3 05 Q2 05 Q1 05 ling ------------------------------------------------------------------------- Bell Canada (excluding Aliant) 100% 10,823(x) 1,504 1,578 1,618 1,605 6,305 Aliant 53.2% 475 225 226 221 210 882 ------------------------------------------------------------------------- Total Bell Canada Consolidated 11,298 1,729 1,804 1,839 1,815 7,187 Other BCE Bell Globemedia 68.5% 260 120 46 114 83 363 Telesat 100% 276 65 70 71 63 269 Corporate and other 100% 3,613 (36) (36) (39) (37) (148) ------------------------------------------------------------------------- Total Other BCE 4,149 149 80 146 109 484 Inter-segment eliminations (20) (20) (13) (21) (74) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total 15,447 1,858 1,864 1,972 1,903 7,597 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Propor- ($ millions, tionate Proportionate EBITDA except where net debt otherwise % and indicated) owned pre- Trai- by BCE ferreds Q4 05 Q3 05 Q2 05 Q1 05 ling ------------------------------------------------------------------------- Bell Canada (excluding Aliant) 100% 10,823(x) 1,504 1,578 1,618 1,605 6,305 Aliant 53.2% 475 120 120 117 112 469 ------------------------------------------------------------------------- Total Bell Canada Consolidated 11,298 1,624 1,698 1,735 1,717 6,774 Other BCE Bell Globemedia 68.5% 260 73 23 68 49 213 Telesat 100% 276 65 70 71 63 269 Corporate and other 100% 3,613 (36) (36) (39) (37) (148) ------------------------------------------------------------------------- Total Other BCE 102 57 100 75 334 Inter-segment eliminations (20) (20) (13) (21) (74) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total 15,447 1,706 1,735 1,822 1,771 7,034 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (x) Bell Canada (excl. Aliant) net debt and preferreds of $10,661 million plus $63 million of inter-company eliminations plus $99 million upon consolidation (PPA fair value increment). Bell Canada Consolidated (1) Operational Data ($ millions, Q4 Q4 Total Total except where otherwise $ % $ % indicated) 2005 2004 change change 2005 2004 change change ------------------------------------------------------------------------- Revenues Local and access 1,343 1,397 (54) (3.9%) 5,446 5,572 (126) (2.3%) Long distance 478 560 (82) (14.6%) 2,044 2,327 (283) (12.2%) Wireless 812 742 70 9.5% 3,097 2,818 279 9.9% Data 1,097 963 134 13.9% 4,015 3,640 375 10.3% Video 268 219 49 22.4% 976 850 126 14.8% Terminal sales and other 459 422 37 8.8% 1,672 1,580 92 5.8% ------------------------------------------------------------------------- Total operating revenues 4,457 4,303 154 3.6% 17,250 16,787 463 2.8% Operating expenses (2,728) (2,624) (104) (4.0%)(10,063) (9,676) (387) (4.0%) ------------------------------------------------------------------------- EBITDA(2) 1,729 1,679 50 3.0% 7,187 7,111 76 1.1% EBITDA margin (%) (3) 38.8% 39.0% (0.2)pts 41.7% 42.4% (0.7)pts Amortization expense (755) (763) 8 1.0% (2,989) (2,962) (27) (0.9%) Net benefit plans cost (66) (62) (4) (6.5%) (389) (235) (154) (65.5%) Restructuring and other items (24) (123) 99 80.5% (54) (1,219) 1,165 95.6% ------------------------------------------------------------------------- Operating income 884 731 153 20.9% 3,755 2,695 1,060 39.3% Other income - 20 (20)(100.0%) 39 183 (144) (78.7%) Interest expense (208) (212) 4 1.9% (827) (863) 36 4.2% ------------------------------------------------------------------------- Pre-tax earnings 676 539 137 25.4% 2,967 2,015 952 47.2% Income taxes (138) (140) 2 1.4% (743) (506) (237) (46.8%) Non-controlling interest (22) 8 (30) n.m. (71) 9 (80) n.m. ------------------------------------------------------------------------- Net earnings before extraordinary gain 516 407 109 26.8% 2,153 1,518 635 41.8% Extraordinary gain - 69 (69)(100.0%) - 69 (69)(100.0%) ------------------------------------------------------------------------- Net earnings 516 476 40 8.4% 2,153 1,587 566 35.7% Dividends on preferred shares (14) (11) (3) (27.3%) (55) (60) 5 8.3% ------------------------------------------------------------------------- Net earnings applicable to common shares 502 465 37 8.0% 2,098 1,527 571 37.4% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other information Cash flow information Free Cash Flow (FCF)(2) Cash from operating activi- ties 1,630 1,293 337 26.1% 5,508 5,333 175 3.3% Capital expendi- tures (736) (985) 249 25.3% (3,122) (3,026) (96) (3.2%) Dividends and distribu- tions (404) (351) (53) (15.1%) (1,747) (1,736) (11) (0.6%) Other investing items 1 (8) 9 n.m. 5 (15) 20 n.m. ------------------------------------------------------------------------- Total 491 (51) 542 n.m. 644 556 88 15.8% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures as a percentage of revenues (%) 16.5% 22.9% 6.4 pts 18.1% 18.0% (0.1)pts Balance Sheet Information Dec. 31 Dec. 31 2005 2004 ------------------------------------------------------------------------- Net Debt Long-term debt 10,177 9,166 Debt due within one year 836 1,352 Less: Cash and cash equivalents (233) (32) ------------------------------------------------------------------------- Total Net Debt 10,780 10,486 Non-controlling interest 1,212 1,229 Total shareholders' equity 10,135 9,670 ------------------------------------------------------------------------- Total Capitalization 22,127 21,385 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net Debt: Total Capitalization 48.7% 49.0% Net Debt: Trailing 12 month EBITDA 1.50 1.47 EBITDA : Interest (trailing 12 month) 8.69 8.24 n.m.: not meaningful Bell Canada Consolidated (1) Operational Data - Historical Trend Total ($ millions, except where otherwise indicated) 2005 Q4 05 Q3 05 Q2 05 Q1 05 ------------------------------------------------------------------------- Revenues Local and access 5,446 1,343 1,367 1,368 1,368 Long distance 2,044 478 510 518 538 Wireless 3,097 812 801 771 713 Data 4,015 1,097 1,001 966 951 Video 976 268 251 236 221 Terminal sales and other 1,672 459 396 399 418 ------------------------------------------------------------------------- Total operating revenues 17,250 4,457 4,326 4,258 4,209 Operating expenses (10,063) (2,728) (2,522) (2,419) (2,394) ------------------------------------------------------------------------- EBITDA(2) 7,187 1,729 1,804 1,839 1,815 EBITDA margin (%)(3) 41.7% 38.8% 41.7% 43.2% 43.1% Amortization expense (2,989) (755) (756) (746) (732) Net benefit plans cost (389) (66) (110) (107) (106) Restructuring and other items (54) (24) (30) (5) 5 ------------------------------------------------------------------------- Operating income (loss) 3,755 884 908 981 982 Other income 39 - 15 13 11 Interest expense (827) (208) (207) (206) (206) ------------------------------------------------------------------------- Pre-tax earnings (loss) 2,967 676 716 788 787 Income taxes (743) (138) (198) (178) (229) Non-controlling interest (71) (22) (16) (17) (16) ------------------------------------------------------------------------- Net earnings (loss) before extraordinary gain 2,153 516 502 593 542 Extraordinary gain - - - - - ------------------------------------------------------------------------- Net earnings 2,153 516 502 593 542 Dividends on preferred shares (55) (14) (14) (13) (14) ------------------------------------------------------------------------- Net earnings applicable to common shares 2,098 502 488 580 528 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other information ------------------------------------------------------------------------- Cash flow information Free Cash Flow (FCF)(2) Cash from operating activities 5,508 1,630 1,551 1,467 860 Capital expenditures (3,122) (736) (873) (847) (666) Dividends and distributions (1,747) (404) (468) (453) (422) Other investing items 5 1 4 4 (4) ------------------------------------------------------------------------- Total 644 491 214 171 (232) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures as a percentage of revenues (%) 18.1% 16.5% 20.2% 19.9% 15.8% Total ($ millions, except where otherwise indicated) 2004 Q4 04 Q3 04 Q2 04 Q1 04 ------------------------------------------------------------------------- Revenues Local and access 5,572 1,397 1,395 1,401 1,379 Long distance 2,327 560 589 572 606 Wireless 2,818 742 727 698 651 Data 3,640 963 915 870 892 Video 850 219 213 211 207 Terminal sales and other 1,580 422 367 420 371 ------------------------------------------------------------------------- Total operating revenues 16,787 4,303 4,206 4,172 4,106 Operating expenses (9,676) (2,624) (2,350) (2,351) (2,351) ------------------------------------------------------------------------- EBITDA(2) 7,111 1,679 1,856 1,821 1,755 EBITDA margin (%)(3) 42.4% 39.0% 44.1% 43.6% 42.7% Amortization expense (2,962) (763) (734) (733) (732) Net benefit plans cost (235) (62) (55) (58) (60) Restructuring and other items (1,219) (123) (1,080) (13) (3) ------------------------------------------------------------------------- Operating income (loss) 2,695 731 (13) 1,017 960 Other income 183 20 114 19 30 Interest expense (863) (212) (215) (216) (220) ------------------------------------------------------------------------- Pre-tax earnings (loss) 2,015 539 (114) 820 770 Income taxes (506) (140) 75 (245) (196) Non-controlling interest 9 8 2 9 (10) ------------------------------------------------------------------------- Net earnings (loss) before extraordinary gain 1,518 407 (37) 584 564 Extraordinary gain 69 69 - - - ------------------------------------------------------------------------- Net earnings 1,587 476 (37) 584 564 Dividends on preferred shares (60) (11) (16) (17) (16) ------------------------------------------------------------------------- Net earnings applicable to common shares 1,527 465 (53) 567 548 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other information ------------------------------------------------------------------------- Cash flow information Free Cash Flow (FCF)(2) Cash from operating activities 5,333 1,293 1,756 1,089 1,195 Capital expenditures (3,026) (985) (736) (715) (590) Dividends and distributions (1,736) (351) (445) (437) (503) Other investing items (15) (8) 1 (1) (7) ------------------------------------------------------------------------- Total 556 (51) 576 (64) 95 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures as a percentage of revenues (%) 18.0% 22.9% 17.5% 17.1% 14.4% Balance Sheet Information Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2005 2005 2005 2005 2004 ------------------------------------------------------------------------- Net Debt Long-term debt 10,177 10,171 10,023 9,657 9,166 Debt due within one year 836 1,365 1,500 1,634 1,352 Less: Cash and cash equivalents (233) (298) (169) (308) (32) ------------------------------------------------------------------------- Total Net Debt 10,780 11,238 11,354 10,983 10,486 Non-controlling interest 1,212 1,125 1,162 1,202 1,229 Total shareholders' equity 10,135 10,067 9,957 9,796 9,670 ------------------------------------------------------------------------- Total Capitalization 22,127 22,430 22,473 21,981 21,385 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net Debt: Total Capitalization 48.7% 50.1% 50.5% 50.0% 49.0% Net Debt : Trailing 12 month EBITDA 1.50 1.57 1.58 1.53 1.47 EBITDA : Interest (trailing 12 month) 8.69 8.59 8.57 8.45 8.24 Bell Canada Consolidated(1) Statistical Data Q4 Q4 % Total Total % 2005 2004 change 2005 2004 change ------------------------------------------------------------------------- Wireline Local Network access services (k) Residential 7,985 8,392 (4.8%) 7,985 8,392 (4.8%) Business 4,596 4,513 1.8% 4,596 4,513 1.8% ------------------------------------------------------------------------- Total 12,581 12,905 (2.5%) 12,581 12,905 (2.5%) SmartTouch feature revenues ($M) 217 233 (6.9%) 890 939 (5.2%) Long Distance (LD) Conversation minutes (M) 4,567 4,559 0.2% 18,306 18,070 1.3% Average revenue per minute ($) 0.096 0.109 (11.9%) 0.102 0.117 (12.8%) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Data Equivalent access lines(9) (k) - Ontario and Quebec Digital equivalent access lines (k) 5,034 4,335 16.1% 5,034 4,335 16.1% Internet subscribers(10) (k) High Speed Internet net activations (k) 61 91 (33.0%) 387 350 10.6% High Speed Internet subscribers (k) 2,195 1,808 21.4% 2,195 1,808 21.4% Dial-up Internet subscribers (k) 586 743 (21.1%) 586 743 (21.1%) ------------------------------------------------------------------------- 2,781 2,551 9.0% 2,781 2,551 9.0% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Wireless Cellular & PCS net activations (k) Pre-paid 83 88 (5.7%) 227 142 59.9% Post-paid 127 129 (1.6%) 289 371 (22.1%) ------------------------------------------------------------------------- 210 217 (3.2%) 516 513 0.6% Cellular & PCS subscribers (k) Pre-paid 1,428 1,201 18.9% 1,428 1,201 18.9% Post-paid 4,013 3,724 7.8% 4,013 3,724 7.8% ------------------------------------------------------------------------- 5,441 4,925 10.5% 5,441 4,925 10.5% Average revenue per unit (ARPU) ($/month) 51 50 2.0% 49 49 0.0% Pre-paid 14 13 7.7% 14 12 16.7% Post-paid 64 61 4.9% 61 61 0.0% Churn (%) (average per month) 1.5% 1.4% (0.1)pts 1.6% 1.3% (0.3)pts Pre-paid 2.2% 1.9% (0.3)pts 1.9% 1.9% 0.0 pts Post-paid 1.3% 1.2% (0.1)pts 1.4% 1.1% (0.3)pts Usage per subscriber (min/month) 261 252 3.6% 255 248 2.8% Cost of acquisition (COA)(11) ($/sub) 409 402 (1.7%) 406 411 1.2% Wireless EBITDA ($ millions) 311 274 13.5% 1,307 1,187 10.1% Wireless EBITDA margin(12) 37.1% 36.2% 0.9 pts 41.2% 41.5% (0.3)pts Wireless capital expenditures ($ millions) 58 125 53.6% 343 362 5.2% Wireless capital expenditures as a percentage of revenue 7.1% 16.8% 9.7 pts 11.1% 12.8% 1.7 pts Paging subscribers (k) 347 427 (18.7%) 347 427 (18.7%) Paging average revenue per unit ($/month) 10 9 11.1% 11 10 10.0% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Video (DTH and VDSL) Total subscribers (k) 1,727 1,503 14.9% 1,727 1,503 14.9% Net subscriber activations (k) 50 43 16.3% 224 116 93.1% ARPU ($/month) 52 49 6.1% 50 49 2.0% COA ($/sub) 258 537 52.0% 375 571 34.3% Video EBITDA ($ millions) 23 (4) n.m. 45 (19) n.m. Churn (%) (average per month) 1.0% 0.8% (0.2)pts 0.9% 1.0% 0.1 pts n.m.: not meaningful Bell Canada Consolidated(1) Statistical Data - Historical Trend Total 2005 Q4 05 Q3 05 Q2 05 Q1 05 ------------------------------------------------------------------------- Wireline Local Network access services (k) Residential 7,985 8,133 8,189 8,332 Business 4,596 4,570 4,538 4,518 ------------------------------------------------------------------------- Total 12,581 12,703 12,727 12,850 SmartTouch feature revenues ($M) 890 217 221 225 227 Long Distance (LD) Conversation minutes (M) 18,306 4,567 4,484 4,667 4,588 Average revenue per minute ($) 0.102 0.096 0.105 0.101 0.107 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Data Equivalent access lines(9) (k) - Ontario and Quebec Digital equivalent access lines (k) 5,034 4,847 4,634 4,469 Internet subscribers(10) (k) High Speed Internet net activations (k) 387 61 106 92 128 High Speed Internet subscribers (k) 2,195 2,134 2,028 1,936 Dial-up Internet subscribers (k) 586 621 666 696 ------------------------------------------------------------------------- 2,781 2,755 2,694 2,632 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Wireless Cellular & PCS net activations (k) Pre-paid 227 83 73 29 42 Post-paid 289 127 50 117 (5) ------------------------------------------------------------------------- 516 210 123 146 37 Cellular & PCS subscribers (k) Pre-paid 1,428 1,345 1,272 1,243 Post-paid 4,013 3,886 3,836 3,719 ------------------------------------------------------------------------- 5,441 5,231 5,108 4,962 Average revenue per unit (ARPU) ($/month) 49 51 51 50 46 Pre-paid 14 14 14 16 11 Post-paid 61 64 63 61 57 Churn (%) (average per month) 1.6% 1.5% 1.5% 1.6% 1.6% Pre-paid 1.9% 2.2% 1.6% 2.1% 1.8% Post-paid 1.4% 1.3% 1.5% 1.4% 1.6% Usage per subscriber (min/month) 255 261 265 262 232 Cost of acquisition (COA)(11) ($/sub) 406 409 432 401 373 Wireless EBITDA ($ millions) 1,307 311 363 333 300 Wireless EBITDA margin(12) 41.2% 37.1% 44.0% 42.4% 41.4% Wireless capital expenditures ($ millions) 343 58 103 118 64 Wireless capital expenditures as a percentage of revenue 11.1% 7.1% 12.9% 15.3% 9.0% Paging subscribers (k) 347 364 385 404 Paging average revenue per unit ($/month) 11 10 10 10 15 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Video (DTH and VDSL) Total subscribers (k) 1,727 1,677 1,595 1,532 Net subscriber activations (k) 224 50 82 63 29 ARPU ($/month) 50 52 51 50 48 COA ($/sub) 375 258 360 462 473 Video EBITDA ($ millions) 45 23 12 6 4 Churn (%) (average per month) 0.9% 1.0% 1.0% 0.9% 0.8% ------------------------------------------------------------------------- Total 2004 Q4 04 Q3 04 Q2 04 Q1 04 ------------------------------------------------------------------------- Wireline Local Network access services (k) Residential 8,392 8,427 8,390 8,476 Business 4,513 4,535 4,548 4,541 ------------------------------------------------------------------------- Total 12,905 12,962 12,938 13,017 SmartTouch feature revenues ($M) 939 233 234 235 237 Long Distance (LD) Conversation minutes (M) 18,070 4,559 4,435 4,498 4,578 Average revenue per minute ($) 0.117 0.109 0.120 0.118 0.120 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Data Equivalent access lines(9) (k) - Ontario and Quebec Digital equivalent access lines (k) 4,335 4,197 4,083 3,983 Internet subscribers(10) (k) High Speed Internet net activations (k) 350 91 84 65 110 High Speed Internet subscribers (k) 1,808 1,717 1,633 1,568 Dial-up Internet subscribers (k) 743 775 807 836 ------------------------------------------------------------------------- 2,551 2,492 2,440 2,404 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Wireless Cellular & PCS net activations (k) Pre-paid 142 88 14 17 23 Post-paid 371 129 95 78 69 ------------------------------------------------------------------------- 513 217 109 95 92 Cellular & PCS subscribers (k) Pre-paid 1,201 1,113 1,099 1,082 Post-paid 3,724 3,595 3,500 3,422 ------------------------------------------------------------------------- 4,925 4,708 4,599 4,504 Average revenue per unit (ARPU) ($/month) 49 50 50 50 47 Pre-paid 12 13 12 11 11 Post-paid 61 61 63 62 59 Churn (%) (average per month) 1.3% 1.4% 1.2% 1.3% 1.3% Pre-paid 1.9% 1.9% 1.9% 1.9% 1.7% Post-paid 1.1% 1.2% 1.0% 1.1% 1.1% Usage per subscriber (min/month) 248 252 258 257 224 Cost of acquisition (COA)(11) ($/sub) 411 402 381 413 455 Wireless EBITDA ($ millions) 1,187 274 334 317 262 Wireless EBITDA margin(12) 41.5% 36.2% 45.4% 44.9% 39.6% Wireless capital expenditures ($ millions) 362 125 95 77 65 Wireless capital expenditures as a percentage of revenue 12.8% 16.8% 13.1% 11.0% 10.0% Paging subscribers (k) 427 449 469 493 Paging average revenue per unit ($/month) 10 9 10 10 10 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Video (DTH and VDSL) Total subscribers (k) 1,503 1,460 1,427 1,403 Net subscriber activations (k) 116 43 33 24 16 ARPU ($/month) 49 49 48 49 48 COA ($/sub) 571 537 548 570 661 Video EBITDA ($ millions) (19) (4) (16) - 1 Churn (%) (average per month) 1.0% 0.8% 1.1% 1.0% 0.9% ------------------------------------------------------------------------- Accompanying Notes (1) We have reclassified some of the figures for the comparative period to make them consistent with the current period's presentation. On December 16, 2005, BCE announced its decision to sell its stake in CGI and that CGI would purchase 100 million of the class A shares held by BCE. As at December 31, 2005 BCE has accounted for CGI as a discontinued operation and no longer proportionally consolidates its financial results. (2) Non-GAAP Financial Measures EBITDA The term, EBITDA (earnings before interest, taxes, depreciation and amortization), does not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP). It is therefore unlikely to be comparable to similar measures presented by other companies. EBITDA is presented on a consistent basis from period to period. We define EBITDA as operating revenues less operating expenses, which means it represents operating income before amortization expense, net benefit plans cost, and restructuring and other items. We use EBITDA, among other measures, to assess the operating performance of our ongoing businesses without the effects of amortization expense, net benefit plans cost, and restructuring and other items. We exclude amortization expense and net benefit plans cost because they largely depend on the accounting methods and assumptions a company uses, as well as non-operating factors, such as the historical cost of capital assets and the fund performance of a company's pension plans. We exclude restructuring and other items because they are transitional in nature. EBITDA allows us to compare our operating performance on a consistent basis. We believe that certain investors and analysts use EBITDA to measure a company's ability to service debt and to meet other payment obligations, or as a common valuation measurement in the telecommunications industry. EBITDA should not be confused with net cash flows from operating activities. The most comparable Canadian GAAP financial measure is operating income. EPS before net gains (losses) on investments and restructuring and other items The term, EPS (earnings per share) before net gains (losses) on investments and restructuring and other items, does not have any standardized meaning prescribed by GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies. We use EPS before net gains (losses) on investments and restructuring and other items, among other measures, to assess the operating performance of our ongoing businesses without the effects of after-tax restructuring and other items and net gains on investments. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. The exclusion of these items does not imply they are necessarily non-recurring. The most comparable Canadian GAAP financial measure is EPS. FREE CASH FLOW The term, free cash flow, does not have any standardized meaning prescribed by Canadian GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies. Free cash flow is presented on a consistent basis from period to period. We define free cash flow as cash from operating activities after capital expenditures, total dividends and other investing activities. We consider free cash flow to be an important indicator of the financial strength and performance of our business because it shows how much cash is available to repay debt and to reinvest in our company. We believe that certain investors and analysts use free cash flow when valuing a business and its underlying assets. The most comparable Canadian GAAP financial measure is cash from operating activities. (3) EBITDA margin is calculated as follows: EBITDA ------------------ Operating revenues (4) Effective Q2 2005 the total Wireless capital expenditures are segregated between the Residential and Business segments. Prior quarters have been restated accordingly. (5) Cash flow per share is calculated as follows: Cash flow from operations less capital expenditures ------------------------------------------------------------ Average number of common shares outstanding during the period (6) Annualized cash flow yield is calculated as follows: Free cash flow from operations before common dividends ------------------------------------------------------ Number of common shares outstanding at end of period multiplied by share price at end of period Note: to annualize, multiply the most recent quarter's resultant by 4. (7) Reflects an increase in the total Bell Canada debt as a result of the completion of the purchase price allocation (PPA) relating to the repurchase of SBC's 20% interest in Bell Canada, which resulted in an increase in long-term debt of $165 million. This increase in long-term debt will be applied against interest expense ($4 million in Q4 2005) over the remaining terms of the related long-term debt. (8) At the BCE Consolidated level, Third Party Preferred Shares reflected in the financial statements of subsidiaries are included in non-controlling interest on the balance sheet. (9) Digital equivalent access lines are derived by converting low capacity data lines (DS-3 and lower) to the equivalent number of voice grade access lines. Broadband equivalent access lines are derived by converting high capacity data lines (higher than DS-3) to the equivalent number of voice grade access lines. Conversion factors DS-0 1 Basic ISDN 2 Primary ISDN 23 DS-1, DEA 24 DS-3 672 OC-3 2,016 OC-12 8,064 OC-48 32,256 OC-192 129,024 10 Base T 155 100 Base T 1,554 Gigabit E 15,554 (10) High Speed Internet subscribers include Residential, Business and Wholesale. Dial-up Internet subscribers include Residential and Business. (11) Includes allocation of selling costs from Bell Canada and excludes costs of migrating from analog to digital. Cost of Acquisition (COA) per subscriber is reflected on a consolidated basis. (12) Wireless EBITDA margins are calculated based on total Wireless operating revenues (i.e. external revenues as shown on pages 10 and 11 plus inter-company revenues). END FIRST AND FINAL ADD BCE INC. CONTACT: PRNewswire -- Feb. 1 |