Untitled Document

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934

 

For the month of: February 2004
Commission File Number: 1-8481

 

BCE Inc.
(Translation of Registrant’s name into English)

1000, rue de La Gauchetière Ouest, Bureau 3700, Montréal, Québec H3B 4Y7, (514) 397-7000
(Address of principal executive offices)

 

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

  Form 20-F

Form 40-F
X

 

Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

  Yes

No
X

 

If "Yes" is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-_____.

 

Notwithstanding any reference to BCE’s Web site on the World Wide Web in the documents attached hereto, the information contained in BCE’s site or any other site on the World Wide Web referred to in BCE’s site is not a part of this Form 6-K and, therefore, is not filed with the Securities and Exchange Commission.

 


 

 






Fourth Quarter 2003

Supplementary Financial Information




For further information,
please contact:

BCE Investor Relations

Sophie Argiriou
(514) 786-8145
sophie.argiriou@bell.ca

George Walker
(514) 870-2488
george.walker@bell.ca

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 1






     BCE Consolidated (1)
Consolidated Operational Data

($ millions, except per share amounts)   Q4
2003
    Q4
2002
    $ change   % change     Total
2003
    Total
2002
    $ change   % change  

 
 
 
 
Operating revenues   4,910     5,045     (135)   (2.7 %)   19,056     19,186     (130 ) (0.7 %)
Operating expenses   (3,056 )   (3,238 )   182   5.6 %   (11,630 )   (11,831 )   201   1.7 %
 
 
 
 
 
EBITDA (2)   1,854     1,807     47   2.6 %   7,426     7,355     71   1.0 %
Amortization expense   (786 )   (773 )   (13)   (1.7 %)   (3,147 )   (3,082 )   (65 ) (2.1 %)
Net benefit plans (cost) credit   (46 )   8     (54)   n.m     (175 )   33     (208 ) n.m  
Restructuring and other charges   (51 )   (395 )   344   87.1 %   (52 )   (887 )   835   94.1 %
 
 
 
 
 
Operating income   971     647     324   50.1 %   4,052     3,419     633   18.5 %
Other income (expense)   136     2,245     (2,109)   (93.9 %)   213     2,433     (2,220 ) (91.2 %)
Impairment charge   -     (765 )   765   n.m     -     (765 )   765   n.m  
Interest expense   (263 )   (341 )   78   22.9 %   (1,093 )   (1,124 )   31   2.8 %
 
 
 
 
 
Earnings from continuing operations before                                            
   income taxes and non-controlling interest   844     1,786     (942)   (52.7 %)   3,172     3,963     (791 ) (20.0 %)
Income taxes   (340 )   (732 )   392   53.6 %   (1,136 )   (1,583 )   447   28.2 %
Non-controlling interest   (46 )   (261 )   215   82.4 %   (191 )   (602 )   411   68.3 %
 
 
 
 
 
Earnings from continuing operations   458     793     (335)   (42.2 %)   1,845     1,778     67   3.8 %
Discontinued operations   (58 )   919     (977)   n.m     (30 )   629     (659 ) n.m  
 
 
 
 
 
Net earnings   400     1,712     (1,312)   (76.6 %)   1,815     2,407     (592 ) (24.6 %)
Dividends on preferred shares   (14 )   (16 )   2   12.5 %   (64 )   (59 )   (5 ) (8.5 %)
Premium on redemption of preferred shares   -     -     -   n.m     (7 )   (6 )   (1 ) (16.7 %)
 
 
 
 
 
Net earnings applicable to common shares   386     1,696     (1,310)   (77.2 %)   1,744     2,342     (598 ) (25.5 %)

 
 
 
 
Net earnings (loss) per common share - basic                                            
   Continuing operations $ 0.48   $ 0.87   $ (0.39)   (44.8 %) $ 1.93   $ 2.00   $ (0.07 ) (3.5 %)
   Discontinued operations $ (0.07 ) $ 1.01   $ (1.08)   n.m   $ (0.03 ) $ 0.66   $ (0.69 ) n.m  
   Net earnings $ 0.41   $ 1.88   $ (1.47)   (78.2 %) $ 1.90   $ 2.66   $ (0.76 ) (28.6 %)
Net earnings (loss) per common share - diluted                                            
   Continuing operations $ 0.48   $ 0.86   $ (0.38)   (44.2 %) $ 1.92   $ 1.98   $ (0.06 ) (3.0 %)
   Discontinued operations $ (0.07 ) $ 0.99   $ (1.06)   n.m   $ (0.03 ) $ 0.64   $ (0.67 ) n.m  
   Net earnings $ 0.41   $ 1.85   $ (1.44)   (77.8 %) $ 1.89   $ 2.62   $ (0.73 ) (27.9 %)
Dividends per common share $ 0.30   $ 0.30   $ -   0.0 % $ 1.20   $ 1.20   $ -   -  
Average number of common shares outstanding - basic (millions)   923.4     909.1               920.3     847.9            

 
 
 
 

 
 
 
 
The following items are included in net earnings:                                            
   Net gains on sale of investments and dilution gains                                            
      Continuing operations   84     1,230               84     1,353            
      Discontinued operations   (73 )   911               (65 )   658            
   Restructuring and other charges   (30 )   (251 )             (24 )   (504 )          
   Impairment charge   -     (527 )             -     (527 )          
 
           
           
Total   (19 )   1,363               (5 )   980            
Impact on net earnings per share $ (0.01 ) $ 1.49             $ -   $ 1.02            

 
 
 
 
                                             
                                             
n.m. : not meaningful                                            

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 2






     BCE Consolidated (1)
Consolidated Operational Data - Historical Trend

($ millions, except per share amounts)   Total
2003
    Q4 03     Q3 03     Q2 03     Q1 03     Total
2002
    Q4 02     Q3 02     Q2 02     Q1 02  

 
 
                                                             
Operating revenues   19,056     4,910     4,702     4,748     4,696     19,186     5,045     4,677     4,797     4,667  
Operating expenses   (11,630 )   (3,056 )   (2,803 )   (2,848 )   (2,923 )   (11,831 )   (3,238 )   (2,792 )   (2,898 )   (2,903 )
 
 
 
EBITDA (2)   7,426     1,854     1,899     1,900     1,773     7,355     1,807     1,885     1,899     1,764  
Amortization expense   (3,147 )   (786 )   (813 )   (786 )   (762 )   (3,082 )   (773 )   (755 )   (796 )   (758 )
Net benefit plans (cost) credit   (175 )   (46 )   (44 )   (43 )   (42 )   33     8     7     12     6  
Restructuring and other charges   (52 )   (51 )   (1 )   -     -     (887 )   (395 )   (79 )   (413 )   -  
 
 
 
Operating income   4,052     971     1,041     1,071     969     3,419     647     1,058     702     1,012  
Other income (expense)   213     136     19     7     51     2,433     2,245     (4 )   190     2  
Impairment charge   -     -     -     -     -     (765 )   (765 )   -     -     -  
Interest expense   (1,093 )   (263 )   (267 )   (285 )   (278 )   (1,124 )   (341 )   (280 )   (253 )   (250 )
 
 
 
Earnings from continuing
   operations before
income
   taxes and non-controlling
   interest
  3,172     844     793     793     742     3,963     1,786     774     639     764  
Income taxes   (1,136 )   (340 )   (285 )   (271 )   (240 )   (1,583 )   (732 )   (304 )   (244 )   (303 )
Non-controlling interest   (191 )   (46 )   (50 )   (57 )   (38 )   (602 )   (261 )   (117 )   (104 )   (120 )
 
 
 
Earnings from continuing
   operations
  1,845     458     458     465     464     1,778     793     353     291     341  
Discontinued operations   (30 )   (58 )   6     13     9     629     919     12     (271 )   (31 )
 
 
 
Net earnings   1,815     400     464     478     473     2,407     1,712     365     20     310  
Dividends on preferred shares   (64 )   (14 )   (18 )   (17 )   (15 )   (59 )   (16 )   (16 )   (14 )   (13 )
Premium on redemption of preferred shares   (7 )   -     -     -     (7 )   (6 )   -     -     -     (6 )
 
 
 
Net earnings applicable to
   common shares
  1,744     386     446     461     451     2,342     1,696     349     6     291  

 
 
Net earnings (loss) per common
   share - basic
                                                           
   Continuing operations $ 1.93   $ 0.48   $ 0.48   $ 0.49   $ 0.48   $ 2.00   $ 0.87   $ 0.39   $ 0.34   $ 0.40  
   Discontinued operations $ (0.03 ) $ (0.07 ) $ 0.01   $ 0.01   $ 0.02   $ 0.66   $ 1.01   $ 0.01   $ (0.33 ) $ (0.03 )
   Net earnings $ 1.90   $ 0.41   $ 0.49   $ 0.50   $ 0.50   $ 2.66   $ 1.88   $ 0.40   $ 0.01   $ 0.37  
Net earnings (loss) per common share - diluted                                                            
   Continuing operations $ 1.92   $ 0.48   $ 0.47   $ 0.49   $ 0.48   $ 1.98   $ 0.86   $ 0.39   $ 0.34   $ 0.39  
   Discontinued operations $ (0.03 ) $ (0.07 ) $ 0.01   $ 0.01   $ 0.02   $ 0.64   $ 0.99   $ 0.01   $ (0.33 ) $ (0.03 )
   Net earnings $ 1.89   $ 0.41   $ 0.48   $ 0.50   $ 0.50   $ 2.62   $ 1.85   $ 0.40   $ 0.01   $ 0.36  
Dividends per common share $ 1.20   $ 0.30   $ 0.30   $ 0.30   $ 0.30   $ 1.20   $ 0.30   $ 0.30   $ 0.30   $ 0.30  
Average number of common
   shares outstanding - basic
  (millions)
  920.3     923.4     921.5     919.3     917.1     847.9     909.1     864.1     808.7     808.6  

 
 

 
 
The following items are included
   in net earnings:
                                                           
   Net gains on sale of investments and dilution gains                                                            
      Continuing operations   84     84     -     -     -     1,353     1,230     12     111     -  
      Discontinued operations   (65 )   (73 )   8     -     -     658     911     -     (253 )   -  
   Restructuring and other charges   (24 )   (30 )   6     -     -     (504 )   (251 )   (37 )   (216 )   -  
   Impairment charge   -     -     -     -     -     (527 )   (527 )   -     -     -  
 
 
 
Total   (5 )   (19 )   14     -     -     980     1,363     (25 )   (358 )   -  
Impact on net earnings per share $ -   $ (0.01 ) $ 0.01   $ -   $ -   $ 1.02   $ 1.49   $ (0.03 ) $ (0.44 ) $ -  

 
 

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 3






BCE Consolidated (1)
Segmented Data

($ millions, except where otherwise indicated) Q4
2003
  Q4
2002
  $ change % change   Total
2003
  Total
2002
  $ change   % change  

 
 
 
 
Revenues                                
Bell Canada Segment 4,281   4,450   (169 ) (3.8 %) 16,698   17,102   (404 ) (2.4 %)
Bell Globemedia 375   379   (4 ) (1.1 %) 1,363   1,290   73   5.7 %

 
   Advertising 283   284   (1 ) (0.4 %) 978   913   65   7.1 %
   Subscriber 69   72   (3 ) (4.2 %) 291   287   4   1.4 %
   Production and Sundry 23   23   -   0.0 % 94   90   4   4.4 %

 
BCE Emergis 77   86   (9 ) (10.5 %) 316   346   (30 ) (8.7 %)

 
   eFinance Solutions 60   68   (8 ) (11.8 %) 249   264   (15 ) (5.7 %)
   eHealth Solutions 17   18   (1 ) (5.6 %) 67   82   (15 ) (18.3 %)

 
BCE Ventures 316   282   34   12.1 % 1,218   1,064   154   14.5 %

 
   CGI 211   185   26   14.1 % 849   709   140   19.7 %
   Telesat 99   95   4   4.2 % 345   327   18   5.5 %
   Other 6   2   4   n.m   24   28   (4 ) (14.3 %)

 
Corporate and other (including inter-segment eliminations) (139 ) (152 ) 13   8.6 % (539 ) (616 ) 77   12.5 %
 
 
 
 
 
Total revenues 4,910   5,045   (135 ) (2.7 %) 19,056   19,186   (130 ) (0.7 %)
 

 

 

 

 
                                 
EBITDA                                
Bell Canada Segment 1,731   1,690   41   2.4 % 7,001   7,079   (78 ) (1.1 %)

 
Bell Canada (including Aliant) 1,752   1,752   -   0.0 % 7,046   7,255   (209 ) (2.9 %)
Bell ExpressVu (21 ) (62 ) 41   66.1 % (45 ) (176 ) 131   74.4 %

 
Bell Globemedia 83   72   11   15.3 % 233   180   53   29.4 %
BCE Emergis 6   10   (4 ) (40.0 %) 15   (29 ) 44   n.m  
BCE Ventures 91   71   20   28.2 % 347   287   60   20.9 %

 
   CGI 33   25   8   32.0 % 131   99   32   32.3 %
   Telesat 55   47   8   17.0 % 206   184   22   12.0 %
   Other 3   (1 ) 4   n.m   10   4   6   n.m  

 
Corporate and other (including inter-segment eliminations) (57 ) (36 ) (21 ) (58.3 %) (170 ) (162 ) (8 ) (4.9 %)
 
 
 
 
 
Total EBITDA 1,854   1,807   47   2.6 % 7,426   7,355   71   1.0 %
 

 

 

 

 

 
EBITDA margin (%) 37.8 % 35.8 %         39.0 % 38.3 %        
EBITDA : Interest expense 7.05   5.30           6.79   6.54          

 
                                 
Net earnings applicable to common shares                                
Bell Canada Segment 493   1,360   (867 ) (63.8 %) 1,773   2,334   (561 ) (24.0 %)

 
   Bell Canada (including Aliant) 530   1,433   (903 ) (63.0 %) 1,900   2,521   (621 ) (24.6 %)
   Bell ExpressVu (37 ) (73 ) 36   49.3 % (127 ) (187 ) 60   32.1 %

 
Bell Globemedia 39   (493 ) 532   n.m   51   (492 ) 543   n.m  
BCE Emergis (27 ) 2   (29 ) n.m   (26 ) (93 ) 67   72.0 %
BCE Ventures 28   31   (3 ) (9.7 %) 135   129   6   4.7 %

 
   CGI 12   14   (2 ) (14.3 %) 55   43   12   27.9 %
   Telesat 11   19   (8 ) (42.1 %) 68   56   12   21.4 %
   Other 5   (2 ) 7   n.m   12   30   (18 ) (60.0 %)

 
Corporate and other (including inter-segment eliminations) (89 ) (123 ) 34   27.6 % (159 ) (165 ) 6   3.6 %
Discontinued operations (58 ) 919   (977 ) n.m   (30 ) 629   (659 ) n.m  
 
 
 
 
 
Total net earnings applicable to common shares 386   1,696   (1,310 ) (77.2 %) 1,744   2,342   (598 ) (25.5 %)
 

 

 

 

 

Proportionate EBITDA, net debt and preferreds

                             
As at December 31, 2003                              
    Proportionate EBITDA        
   
       
  BCE
Ownership (%)
  Q4 03   Q3 03   Q2 03   Q1 03   12-Mth
Trailing
  Proportionate
net debt and
preferreds
   
 
 
   
Bell Canada Segment                              
   Bell Canada (excl. Aliant & ExpressVu) 100 % 1,535   1,593   1,536   1,507   6,171   10,969   (a)
   Aliant 53.5 % 116   125   125   103   469   437    
   ExpressVu 100 % (21 ) (9 ) (9 ) (6 ) (45 ) (3 ) (b)
     
 
   
Total Bell Canada Segment     1,630   1,709   1,652   1,604   6,595   11,403    
Bell Globemedia 68.5 % 50   18   45   21   134   109    
BCE Emergis 63.9 % 4   3   3   -   10   (64 )  
BCE Ventures                              
   CGI 29.8 % 33   32   35   31   131   41    
   Telesat 100 % 55   51   50   50   206   443    
   Other 100 % 3   2   3   2   10   2    
     
 
 
 
 
 
   
Total BCE Ventures     91   85   88   83   347   486    
Corporate 100 % (57 ) (43 ) (30 ) (40 ) (170 )      
   Perpetual Preferred Shares                         1,670    
   Debt due within one year                         351   (c)
   Long term debt                         2,000    
   less:                              
   Cash and cash equivalents                         (133 )  
   Nortel common shares at market                         (77 )  
                         
   
Total Corporate                         3,811    
     
 
   
Total     1,718   1,772   1,758   1,668   6,916   15,745    

 
n.m. : not meaningful                              
(a) Net of $498 million of intersegment debt.
(b) Net of $422 million of intersegment debt.
(c) Represents $351 million of retractable preferred shares

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 4






     BCE Consolidated (1)
Segmented Data - Historical Trend

                                       
($ millions, except where otherwise indicated) Total
2003
  Q4 03   Q3 03   Q2 03   Q1 03   Total
2002
  Q4 02   Q3 02   Q2 02   Q1 02  

 
 
Revenues                                        
Bell Canada Segment 16,698   4,281   4,169   4,145   4,103   17,102   4,450   4,219   4,276   4,157  
Bell Globemedia 1,363   375   296   357   335   1,290   379   273   326   312  

 
   Advertising 978   283   201   259   235   913   284   180   230   219  
   Subscriber 291   69   73   75   74   287   72   72   70   73  
   Production and Sundry 94   23   22   23   26   90   23   21   26   20  

 
BCE Emergis 316   77   78   82   79   346   86   86   91   83  

 
   eFinance Solutions 249   60   63   64   62   264   68   65   66   65  
   eHealth Solutions 67   17   15   18   17   82   18   21   25   18  

 
BCE Ventures 1,218   316   295   304   303   1,064   282   258   261   263  

 
   CGI 849   211   205   214   219   709   185   177   176   171  
   Telesat 345   99   84   83   79   327   95   77   78   77  
   Other 24   6   6   7   5   28   2   4   7   15  

 
Corporate and other (including inter-segment eliminations) (539 ) (139 ) (136 ) (140 ) (124 ) (616 ) (152 ) (159 ) (157 ) (148 )
 
 
 
Total revenues 19,056   4,910   4,702   4,748   4,696   19,186   5,045   4,677   4,797   4,667  
 

 

 
                                         
EBITDA                                        
Bell Canada Segment 7,001   1,731   1,817   1,760   1,693   7,079   1,690   1,849   1,816   1,724  

 
   Bell Canada (including Aliant) 7,046   1,752   1,826   1,769   1,699   7,255   1,752   1,888   1,841   1,774  
   Bell ExpressVu (45 ) (21 ) (9 ) (9 ) (6 ) (176 ) (62 ) (39 ) (25 ) (50 )

 
Bell Globemedia 233   83   36   77   37   180   72   17   58   33  
BCE Emergis 15   6   4   5   -   (29 ) 10   (3 ) (3 ) (33 )
BCE Ventures 347   91   85   88   83   287   71   66   73   77  

 
   CGI 131   33   32   35   31   99   25   21   28   25  
   Telesat 206   55   51   50   50   184   47   44   46   47  
   Other 10   3   2   3   2   4   (1 ) 1   (1 ) 5  

 
Corporate and other (including inter-segment eliminations) (170 ) (57 ) (43 ) (30 ) (40 ) (162 ) (36 ) (44 ) (45 ) (37 )
 
 
 
Total EBITDA 7,426   1,854   1,899   1,900   1,773   7,355   1,807   1,885   1,899   1,764  
 

 

 

 
EBITDA margin (%) 39.0 % 37.8 % 40.4 % 40.0 % 37.8 % 38.3 % 35.8 % 40.3 % 39.6 % 37.8 %
EBITDA : Interest expense 6.79   7.05   7.11   6.67   6.38   6.54   5.30   6.73   7.51   7.06  

 
                                         
Net earnings applicable to common shares                                        
Bell Canada Segment 1,773   493   439   415   426   2,334   1,360   325   340   309  

 
   Bell Canada (including Aliant) 1,900   530   471   446   453   2,521   1,433   357   375   356  
   Bell ExpressVu (127 ) (37 ) (32 ) (31 ) (27 ) (187 ) (73 ) (32 ) (35 ) (47 )

 
Bell Globemedia 51   39   (1 ) 15   (2 ) (492 ) (493 ) (11 ) 11   1  
BCE Emergis (26 ) (27 ) 5   (2 ) (2 ) (93 ) 2   2   (73 ) (24 )
BCE Ventures 135   28   30   38   39   129   31   15   59   24  

 
   CGI 55   12   12   13   18   43   14   7   11   11  
   Telesat 68   11   15   22   20   56   19   8   16   13  
   Other 12   5   3   3   1   30   (2 ) -   32   -  

 
Corporate and other (including inter-segment eliminations) (159 ) (89 ) (33 ) (18 ) (19 ) (165 ) (123 ) 6   (60 ) 12  
Discontinued operations (30 ) (58 ) 6   13   9   629   919   12   (271 ) (31 )
 
 
 
Total net earnings applicable to common shares 1,744   386   446   461   451   2,342   1,696   349   6   291  
 

 

 

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 5






    BCE Consolidated (1)
Consolidated Balance Sheet Data

($ millions, except where otherwise indicated) December 31
2003
  December 31
2002
 


 
 
ASSETS        
Current assets        
   Cash and cash equivalents 714   263  
   Accounts receivable 2,077   2,181  
   Other current assets 745   731  
   Current assets of discontinued operations 45   257  
 
 
 
Total current assets 3,581   3,432  
Capital assets 21,189   20,380  
Other long-term assets 3,550   3,789  
Indefinite-life intangible assets 2,910   900  
Goodwill 7,825   9,471  
Non-current assets of discontinued operations 276   1,134  
 
 
 
Total assets 39,331   39,106  


 
 
LIABILITIES        
Current liabilities        
   Accounts payable and accrued liabilities 3,691   3,712  
   Debt due within one year 1,537   1,957  
   Current liabilities of discontinued operations 27   191  
 
 
 
Total current liabilities 5,255   5,860  
Long-term debt 12,393   13,117  
Other long-term liabilities 4,699   3,650  
Non-current liabilities of discontinued operations 1   280  
 
 
 
Total liabilities 22,348   22,907  
 
 
 
Non-controlling interest 3,403   3,584  
 
 
 
SHAREHOLDERS' EQUITY        
Preferred shares 1,670   1,510  
 
 
 
Common shareholders' equity        
   Common shares 16,749   16,520  
   Contributed surplus 1,037   1,010  
   Deficit (5,830 ) (6,435 )
   Currency translation adjustment (46 ) 10  
 
 
 
Total common shareholders' equity 11,910   11,105  
 
 
 
Total shareholders' equity 13,580   12,615  
 
 
 
Total liabilities and shareholders' equity 39,331   39,106  


 
 
Number of common shares outstanding 924.0   915.9  


 
 
         
Capital Structure        
         
Net debt : Total Capitalization 43.8 % 48.4 %
Net debt : Trailing 12 month EBITDA 1.78   2.06  

 

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 6






     BCE Consolidated (1)
Consolidated Cash Flow Data

($ millions, except where otherwise indicated)   Q4
2003
    Q4
2002
    $ change     Total
2003
    Total
2002
    $ change  

 
   
 
 
Cash flows from operating activities                                    
   Earnings from continuing operations   458     793     (335 )   1,845     1,778     67  
   Adjustments to reconcile earnings from continuing                                    
      operations to cash flows from operating activities:                                    
         Amortization expense   786     773     13     3,147     3,082     65  
         Net benefit plans cost (credit)   46     (8 )   54     175     (33 )   208  
         Restructuring and other charges (non-cash portion)   49     333     (284 )   44     805     (761 )
         Impairment charge   -     765     (765 )   -     765     (765 )
         Net gains on investments   (101 )   (2,254 )   2,153     (76 )   (2,414 )   2,338  
         Future income taxes   217     570     (353 )   433     518     (85 )
         Non-controlling interest   46     261     (215 )   191     602     (411 )
         Contributions to employee benefit plans and other                                    
            benefit plan payments   (110 )   (29 )   (81 )   (247 )   (97 )   (150 )
         Other items   (31 )   46     (77 )   (90 )   (12 )   (78 )
         Change in non-cash working capital   250     (112 )   362     593     (616 )   1,209  
 
 
 
 
 
    1,610     1,138     472     6,015     4,378     1,637  

 
   
 
 
   Capital expenditures   (1,083 )   (1,066 )   (17 )   (3,179 )   (3,731 )   552  
   Other items   (7 )   (1 )   (6 )   64     13     51  
   Cash preferred dividends and cash dividends paid by subsidiaries                                    
      to non-controlling interest   (69 )   (160 )   91     (245 )   (511 )   266  

 
   
 
 
Free Cash Flow from operations, before common dividends (2)   451     (89 )   540     2,655     149     2,506  
   Cash common dividends   (259 )   (271 )   12     (1,029 )   (999 )   (30 )
 
 
 
 
 
Free Cash Flow from operations, after common dividends (2)   192     (360 )   552     1,626     (850 )   2,476  
   Business acquisitions   (42 )   (5,078 )   5,036     (119 )   (6,471 )   6,352  
   Business dispositions   -     2,758     (2,758 )   55     3,190     (3,135 )
   Decrease (increase) in investments accounted for under the cost                                    
      and equity methods   151     (13 )   164     164     (86 )   250  
 
 
 
 
 
Free Cash Flow after investments and divestitures   301     (2,693 )   2,994     1,726     (4,217 )   5,943  
 
 
 
 
 
                                     
Other financing activities                                    
   Decrease in notes payable and bank advances   (53 )   (633 )   580     (295 )   (213 )   (82 )
   Issue of long-term debt   105     2,509     (2,404 )   1,986     4,908     (2,922 )
   Repayment of long-term debt   (1,538 )   (2,068 )   530     (3,515 )   (2,720 )   (795 )
   Issue of common shares   5     303     (298 )   19     2,693     (2,674 )
   Issue of preferred shares   -     -     -     510     510     -  
   Redemption of preferred shares   -     -     -     (357 )   (306 )   (51 )
   Costs relating to the issuance of common shares   -     -     -     -     (78 )   78  
   Issue of equity securities and convertible debentures by                                    
     subsidiaries to non-controlling interest   19     4     15     130     93     37  
   Redemption of equity securities by subsidiaries   (34 )   -     (34 )   (108 )   -     (108 )
   Other items   (42 )   (9 )   (33 )   (44 )   (44 )   -  
 
 
 
 
 
    (1,538 )   106     (1,644 )   (1,674 )   4,843     (6,517 )

 
   
 
 
Cash provided by (used in) continuing operations   (1,237 )   (2,587 )   1,350     52     626     (574 )
Cash provided by (used in) discontinued operations   342     23     319     364     (889 )   1,253  
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents   (895 )   (2,564 )   1,669     416     (263 )   679  
Cash and cash equivalents at beginning of period   1,617     2,870     (1,253 )   306     569     (263 )
 
 
 
 
 
Cash and cash equivalents at end of period   722     306     416     722     306     416  
 
 
 
 
 
   Consists of:                                    
      Cash and cash equivalents of continuing operations   714     263     451     714     263     451  
      Cash and cash equivalents of discontinued operations   8     43     (35 )   8     43     (35 )
 
 
 
 
 
   Total   722     306     416     722     306     416  

 
   
 
 
Other information                                    
                                     
Capital expenditures as a percentage of revenues   22.1 %   21.1 %   (1.0) pts     16.7 %   19.4 %   2.7 pts
Cash flow per share (3) $ 0.57   $ 0.08   $ 0.49   $ 3.08   $ 0.76   $ 2.32  
Annualized cash flow yield (4)   6.8 %   (1.2 %)   8.0 pts   9.9 %   0.6 %   9.3 pts
Common dividend payout   67.1 %   16.0 %   51.1 pts   59.0 %   42.7 %   16.3 pts

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 7






     BCE Consolidated (1)
Consolidated Cash Flow Data - Historical Trend

($ millions, except where otherwise indicated)  

Total
2003

    Q4 03     Q3 03     Q2 03     Q1 03     Total
2002
    Q4 02     Q3 02     Q2 02     Q1 02  












 
Cash flows from operating activities                                                            
   Earnings from continuing operations   1,845     458     458     465     464     1,778     793     353     291     341  
   Adjustments to reconcile earnings from continuing                                                            
   operations to cash flows from operating activities:                                                            
         Amortization expense   3,147     786     813     786     762     3,082     773     755     796     758  
         Net benefit plans cost (credit)   175     46     44     43     42     (33 )   (8 )   (7 )   (12 )   (6 )
         Restructuring and other charges (non-cash
                   portion)
  44     49     (5 )   -     -     805     333     67     405     -  
         Impairment charge   -     -     -     -     -     765     765     -     -     -  
         Net gains on investments   (76 )   (101 )   25     -     -     (2,414 )   (2,254 )   (12 )   (148 )   -  
         Future income taxes   433     217     134     102     (20 )   518     570     103     (136 )   (19 )
         Non-controlling interest   191     46     50     57     38     602     261     117     104     120  
         Contributions to employee benefit plans and                                                            
            other benefit plan payments   (247 )   (110 )   (68 )   (42 )   (27 )   (97 )   (29 )   (24 )   (22 )   (22 )
         Other items   (90 )   (31 )   (12 )   (91 )   44     (12 )   46     (55 )   (16 )   13  
         Change in non-cash working capital   593     250     429     60     (146 )   (616 )   (112 )   145     (88 )   (561 )
   
 
    6,015     1,610     1,868     1,380     1,157     4,378     1,138     1,442     1,174     624  












 
   Capital expenditures   (3,179 )   (1,083 )   (794 )   (708 )   (594 )   (3,731 )   (1,066 )   (896 )   (924 )   (845 )
   Other items   64     (7 )   156     (45 )   (40 )   13     (1 )   26     15     (27 )
   Cash preferred dividends and cash dividends paid                                                            
      by subsidiaries to non-controlling interest   (245 )   (69 )   (52 )   (69 )   (55 )   (511 )   (160 )   (146 )   (127 )   (78 )












 
Free Cash Flow from operations, before common dividends   2,655     451     1,178     558     468     149     (89 )   426     138     (326 )
   Cash common dividends   (1,029 )   (259 )   (259 )   (254 )   (257 )   (999 )   (271 )   (243 )   (242 )   (243 )
   
 
Free Cash Flow from operations, after common dividends (2)   1,626     192     919     304     211     (850 )   (360 )   183     (104 )   (569 )
   Business acquisitions   (119 )   (42 )   (7 )   (7 )   (63 )   (6,471 )   (5,078 )   (1,378 )   -     (15 )
   Business dispositions   55     -     55     -     -     3,190     2,758     -     306     126  
   Decrease (increase) in investments accounted for                                                            
      under the cost and equity methods   164     151     7     (1 )   7     (86 )   (13 )   (8 )   (8 )   (57 )
   
 
Free Cash Flow after investments and divestitures   1,726     301     974     296     155     (4,217 )   (2,693 )   (1,203 )   194     (515 )
   
 
Other financing activities                                                            
   Decrease in notes payable and bank advances   (295 )   (53 )   (73 )   (56 )   (113 )   (213 )   (633 )   (58 )   600     (122 )
   Issue of long-term debt   1,986     105     17     72     1,792     4,908     2,509     1,104     43     1,252  
   Repayment of long-term debt   (3,515 )   (1,538 )   (147 )   (1,464 )   (366 )   (2,720 )   (2,068 )   (291 )   (261 )   (100 )
   Issue of common shares   19     5     5     4     5     2,693     303     2,381     7     2  
   Issue of preferred shares   510     -     -     -     510     510     -     -     -     510  
   Redemption of preferred shares   (357 )   -     -     -     (357 )   (306 )   -     -     -     (306 )
   Costs relating to the issuance of common shares   -     -     -     -     -     (78 )   -     (78 )   -     -  
   Issue of equity securities and convertible debentures by                                                            
         subsidiaries to non-controlling interest   130     19     24     14     73     93     4     44     38     7  
   Redemption of equity securities by subsidiaries   (108 )   (34 )   (39 )   (16 )   (19 )   -     -     -     -     -  
   Other items   (44 )   (42 )   56     (56 )   (2 )   (44 )   (9 )   (39 )   10     (6 )
   
 
    (1,674 )   (1,538 )   (157 )   (1,502 )   1,523     4,843     106     3,063     437     1,237  



 

 

 

 

 

 

 

 

 

 
Cash provided by (used in) continuing operations   52     (1,237 )   817     (1,206 )   1,678     626     (2,587 )   1,860     631     722  
Cash (provided by) used in discontinued operations   364     342     4     14     4     (889 )   23     20     (533 )   (399 )
   
 
Net increase (decrease) in cash and cash equivalents   416     (895 )   821     (1,192 )   1,682     (263 )   (2,564 )   1,880     98     323  
Cash and cash equivalents at beginning of period   306     1,617     796     1,988     306     569     2,870     990     892     569  
   
 
Cash and cash equivalents at end of period   722     722     1,617     796     1,988     306     306     2,870     990     892  
   
 
   Consists of:                                                            
      Cash and cash equivalents of continuing
              operations
  714     714     1,552     735     1,941     263     263     2,850     990     359  
      Cash and cash equivalents of discontinued
              operations
  8     8     65     61     47     43     43     20     -     533  
   
 
   Total   722     722     1,617     796     1,988     306     306     2,870     990     892  



 
Other information                                                            
                                                             
Capital expenditures as a percentage of revenues   16.7 %   22.1 %   16.9 %   14.9 %   12.6 %   19.4 %   21.1 %   19.2 %   19.3 %   18.1 %
Cash flow per share (3) $ 3.08   $ 0.57   $ 1.17   $ 0.73   $ 0.61   $ 0.76   $ 0.08   $ 0.63   $ 0.31   $ (0.27 )
Annualized cash flow yield (4)   9.9 %   6.8 %   17.6 %   8.0 %   7.6 %   0.6 %   (1.2 %)   6.8 %   2.4 %   (5.6 %)
Common dividend payout   59.0 %   67.1 %   58.1 %   55.1 %   57.0 %   42.7 %   16.0 %   69.6 %  
n.m.
    83.5 %



 

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 8






Bell Canada Segment (1)
Operational Data

($ millions, except where otherwise indicated) Q4
2003
  Q4
2002
  $ change   % change   Total
2003
  Total
2002
  $ change   % change  

 
 
 
 
Revenues                                
Local and access 1,563   1,564   (1 ) (0.1 %) 6,105   6,129   (24 ) (0.4 %)
Long distance 602   635   (33 ) (5.2 %) 2,487   2,579   (92 ) (3.6 %)
Wireless 674   581   93   16.0 % 2,526   2,203   323   14.7 %
Data 972   1,024   (52 ) (5.1 %) 3,791   3,770   21   0.6 %
Bell ExpressVu 201   176   25   14.2 % 761   638   123   19.3 %
Terminal sales and other 269   379   (110 ) (29.0 %) 1,028   1,282   (254 ) (19.8 %)
Directory advertising -   91   (91 ) n.m   -   501   (501 ) n.m  
 
 


 


 


 
  4,281   4,450   (169 ) (3.8 %) 16,698   17,102   (404 ) (2.4 %)
Cash operating expenses (2,550 ) (2,760 ) 210   7.6 % (9,697 ) (10,023 ) 326   3.3 %
 
 


 


 


 
EBITDA 1,731   1,690   41   2.4 % 7,001   7,079   (78 ) (1.1 %)
















 
   Bell Canada (including Aliant) 1,752   1,752   -   0.0 % 7,046   7,255   (209 ) (2.9 %)
   Bell ExpressVu (21 ) (62 ) 41   66.1 % (45 ) (176 ) 131   74.4 %
















 
















 
EBITDA margin (%) 40.4 % 38.0 %     2.4 pts 41.9 % 41.4 %     0.5 pts
















 
Amortization expense (742 ) (734 ) (8 ) (1.1 %) (2,970 ) (2,894 ) (76 ) (2.6 %)
Net benefit plans (cost) credit (46 ) 9   (55 ) n.m   (181 ) 38   (219 ) n.m  
Restructuring and other charges (13 ) (302 ) 289   95.7 % (14 ) (675 ) 661   97.9 %
 
 


 


 


 
Operating income 930   663   267   40.3 % 3,836   3,548   288   8.1 %
Interest expense (231 ) (293 ) 62   21.2 % (945 ) (1,108 ) 163   14.7 %
Other income (expense) 134   2,284   (2,150 ) (94.1 %) 194   2,434   (2,240 ) (92.0 %)
Impairment charge -   (50 ) 50   n.m   -   (50 ) 50   n.m  
 
 


 


 


 
Earnings before income taxes and                                
   non-controlling interest 833   2,604   (1,771 ) (68.0 %) 3,085   4,824   (1,739 ) (36.0 %)
Income taxes (316 ) (766 ) 450   58.7 % (1,127 ) (1,609 ) 482   30.0 %
Non-controlling interest (15 ) (20 ) 5   25.0 % (102 ) (101 ) (1 ) (1.0 %)
 
 


 


 


 
Earnings from continuing operations 502   1,818   (1,316 ) (72.4 %) 1,856   3,114   (1,258 ) (40.4 %)
Discontinued operations 53   (3 ) 56   n.m   59   14   45   n.m  
 
 


 


 


 
Net earnings 555   1,815   (1,260 ) (69.4 %) 1,915   3,128   (1,213 ) (38.8 %)
Dividends on preferred shares (9 ) (15 ) 6   40.0 % (58 ) (63 ) 5   7.9 %
Interest on equity settled notes -   (15 ) 15   n.m   (25 ) (59 ) 34   57.6 %
 
 


 


 


 
Net earnings applicable to common shares 546   1,785   (1,239 ) (69.4 %) 1,832   3,006   (1,174 ) (39.1 %)




 


 


 


 
                                 




 


 


 


 
The following items are included in net earnings:                                
   Net gains on sale of investments and
        dilution gains
                               
      Continuing operations 86   1,655           92   1,848          
      Discontinued operations 48   (6 )         56   5          
   Restructuring and other charges (9 ) (190 )         (9 ) (426 )        
   Impairment charge -   (26 )         -   (26 )        
   Other -   -           -   (18 )        
 


         


         
Total 125   1,433           139   1,383          




 


 


 


 
                                 
Other information                                
                                 
Capital expenditures 991   974   (17 ) (1.7 %) 2,892   3,390   498   14.7 %
Capital expenditures as a percentage of
    revenues (%)
23.1 % 21.9 %     (1.2) pts   17.3 % 19.8 %     2.5 pts




 


 


 


 
                                 
Net debt and preferreds                                
At December 31, 2003 Bell
Canada
  Aliant   Bell
ExpressVu
  Bell
Canada
Consolidated
  Inter-
company
eliminations
  Bell
Canada
Segment
         

         
                                 
Bank indebtedness / (cash and cash equivalents) (30 ) (365 ) (3 ) (398 ) -   (398 )        
Long term debt 8,743   889   392   10,024   (392 ) 9,632          
Debt due within one year 1,015   120   30   1,165   (30 ) 1,135          
Long-term note receivable from BCH (498 ) -   -   (498 ) 498   -          
PPA fair value increment (5)                     141          
 
 
         
Net debt 9,230   644   419   10,293   76   10,510          
Preferred shares - Bell Canada (6) 1,100   -   -   1,100   -   1,100          
Preferred shares - Aliant (6) -   172       172   -   172          
 
 
         
Net debt and preferreds 10,330   816   419   11,565   76   11,782          

         

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 9






     Bell Canada Segment (1)
Operational Data - Historical Trend

                                         
($ millions, except where otherwise indicated) Total
2003
  Q4 03   Q3 03   Q2 03   Q1 03   Total
2002
  Q4 02   Q3 02   Q2 02   Q1 02  




















 
Revenues                                        
Local and access 6,105   1,563   1,530   1,512   1,500   6,129   1,564   1,519   1,527   1,519  
Long distance 2,487   602   631   608   646   2,579   635   651   645   648  
Wireless 2,526   674   661   621   570   2,203   581   570   548   504  
Data 3,791   972   931   955   933   3,770   1,024   908   933   905  
Bell ExpressVu 761   201   192   191   177   638   176   156   155   151  
Terminal sales and other 1,028   269   224   258   277   1,282   379   275   330   298  
Directory advertising -   -   -   -   -   501   91   140   138   132  
 
 
  16,698   4,281   4,169   4,145   4,103   17,102   4,450   4,219   4,276   4,157  
Cash operating expenses (9,697 ) (2,550 ) (2,352 ) (2,385 ) (2,410 ) (10,023 ) (2,760 ) (2,370 ) (2,460 ) (2,433 )
 
 
                                         
EBITDA 7,001   1,731   1,817   1,760   1,693   7,079   1,690   1,849   1,816   1,724  




















 
   Bell Canada (including Aliant) 7,046   1,752   1,826   1,769   1,699   7,255   1,752   1,888   1,841   1,774  
   Bell ExpressVu (45 ) (21 ) (9 ) (9 ) (6 ) (176 ) (62 ) (39 ) (25 ) (50 )




















 




















 
EBITDA margin (%) 41.9 % 40.4 % 43.6 % 42.5 % 41.3 % 41.4 % 38.0 % 43.8 % 42.5 % 41.5 %




















 
Amortization expense (2,970 ) (742 ) (758 ) (747 ) (723 ) (2,894 ) (734 ) (711 ) (746 ) (703 )
Net benefit plans (cost) credit (181 ) (46 ) (46 ) (45 ) (44 ) 38   9   10   11   8  
Restructuring and other charges (14 ) (13 ) (1 ) -   -   (675 ) (302 ) (79 ) (294 ) -  
 
 
Operating income 3,836   930   1,012   968   926   3,548   663   1,069   787   1,029  
Interest expense (945 ) (231 ) (239 ) (232 ) (243 ) (1,108 ) (293 ) (282 ) (266 ) (267 )
Other income (expense) 194   134   3   13   44   2,434   2,284   (32 ) 190   (8 )
Impairment charge -   -   -   -   -   (50 ) (50 ) -   -   -  
 
 
Earnings before income taxes and                                        
   non-controlling interest 3,085   833   776   749   727   4,824   2,604   755   711   754  
Income taxes (1,127 ) (316 ) (291 ) (273 ) (247 ) (1,609 ) (766 ) (300 ) (242 ) (301 )
Non-controlling interest (102 ) (15 ) (29 ) (35 ) (23 ) (101 ) (20 ) (36 ) (21 ) (24 )
 
 
Earnings from continuing operations 1,856   502   456   441   457   3,114   1,818   419   448   429  
Discontinued operations 59   53   -   5   1   14   (3 ) (1 ) 13   5  
 
 
Net earnings 1,915   555   456   446   458   3,128   1,815   418   461   434  
Dividends on preferred shares (58 ) (9 ) (17 ) (16 ) (16 ) (63 ) (15 ) (16 ) (16 ) (16 )
Interest on equity settled notes (25 ) -   -   (10 ) (15 ) (59 ) (15 ) (14 ) (16 ) (14 )
 
 
Net earnings applicable to common shares 1,832   546   439   420   427   3,006   1,785   388   429   404  




















 
                                         




















 
The following items are included in net earnings:                                        
   Net gains on sale of investments and dilution gains                                        
      Continuing operations 92   86   6   -   -   1,848   1,655   -   193   -  
      Discontinued operations 56   48   8   -   -   5   (6 ) -   11   -  
   Restructuring and other charges (9 ) (9 ) -   -   -   (426 ) (190 ) (45 ) (191 ) -  
   Impairment charge -   -   -   -   -   (26 ) (26 ) -   -   -  
   Other -   -   -   -   -   (18 ) -   -   (18 ) -  
 
 
Total 139   125   14   -   -   1,383   1,433   (45 ) (5 ) -  




















 
                                         
Other information                                        
                                         
Capital expenditures 2,892   991   708   659   534   3,390   974   831   824   761  
Capital expenditures as a percentage of revenues (%) 17.3 % 23.1 % 17.0 % 15.9 % 13.0 % 19.8 % 21.9 % 19.7 % 19.3 % 18.3 %




















 

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 10






Bell Canada Segment
Statistical Data*

  Q4
2003
  Q4
2002
  % change   Total
2003
  Total
2002
  % change  

 
 
 
 
Wireline                        
Local                        
Network access services (k)                        
   Residential             8,511   8,573   (0.7 %)
   Business             4,540   4,581   (0.9 %)
             
 
 
Total network access services             13,051   13,154   (0.8 %)
                         
Estimated percentage of wireline NAS - Ontario and Quebec(7)                        
   Residential 96.9 % 97.9 % (1.0)pts              
   Business 90.4 % 91.3 % (0.9)pts              
 
 
 
             
Total estimated percentage of wireline NAS 94.6 % 95.5 % (0.9)pts              
                         
SmartTouch feature revenues ($M) 233   231   0.9 % 931   923   0.9 %
                         
Long Distance (LD)                        
Conversation minutes (M) 4,685   5,000   (6.3 %) 19,132   19,034   0.5 %
Average revenue per minute ($) 0.122   0.120   1.7 % 0.124   0.126   (1.6 %)
Estimated percentage of traditional wireline LD revenues - Ontario and Quebec (8) 62.9 % 63.0 % (0.1) pts              

 
 
 
 
Data                        
Data revenues ($M)(9)                        
   Legacy 387   486   (20.4 %) 1,644   1,864   (11.8 %)
   Non-Legacy 585   538   8.7 % 2,147   1,906   12.6 %
 
 
 
 
 
  972   1,024   (5.1 %) 3,791   3,770   0.6 %
                         
Equivalent access lines (10) (k) - Bell Canada only                        
Digital equivalent access lines             3,867   3,683   5.0 %
Broadband equivalent access lines             16,651   12,568   32.5 %
                         
Internet subscribers (11) (k)                        
DSL High Speed Internet subscribers (k)             1,482   1,110   33.5 %
Dial-up Internet subscribers (k)             869   957   (9.2 %)
             
 
 
              2,351   2,067   13.7 %

 
 
 
 
Wireless                        
Cellular & PCS Net activations (k)                        
   Pre-paid 33   19   73.7 % 101   -   n.m  
   Post-paid 156   196   (20.4 %) 413   452   (8.6 %)
 
 
 
 
 
  189   215   (12.1 %) 514   452   13.7 %
Cellular & PCS subscribers (k)                        
   Pre-paid             1,059   958   10.5 %
   Post-paid             3,353   2,940   14.0 %
             
 
 
              4,412   3,898   13.2 %
                         
Average revenue per unit ($/month) 50   47   6.4 % 48   47   2.1 %
   Pre-paid 12   10   20.0 % 12   12   0.0 %
   Post-paid 62   60   3.3 % 60   59   1.7 %
                         
Churn (%) (average per month) 1.4 % 1.7 % 0.3 pts 1.4 % 1.7 % 0.3 pts
   Pre-paid 1.8 % 2.7 % 0.9 pts 1.9 % 2.2 % 0.3 pts
   Post-paid 1.2 % 1.4 % 0.2 pts 1.3 % 1.5 % 0.2 pts
                         
Usage per subscriber (min/month) 240   214   12.1 % 228   204   11.8 %
Cost of acquisition (12) ($/sub) 445   409   (8.8 %) 426   429   0.7 %
Wireless EBITDA 229   151   51.7 % 918   754   21.8 %
Wireless EBITDA margin 34.0 % 26.0 % 8.0 pts 36.3 % 34.2 % 2.1 pts
                         
Browser hits (M) 190   99   91.9 % 653   392   66.6 %
                         
Paging subscribers (k)             524   639   (18.0 %)
Paging average revenue per unit ($/month) 10   10   0.0 % 10   10   0.0 %

 
 
 
 
Bell ExpressVu (Direct-to-Home Satellite Service)                        
Total subscribers (k)             1,387   1,304   6.4 %
Net subscriber activations (k) 35   83   (57.8 %) 83   235   (64.7 %)
Average revenue per subscriber ($/month) 48   43   11.6 % 46   44   4.5 %
Cost of acquisition ($/sub) 735   667   (10.2 %) 671   690   2.8 %
Churn (%) (average per month) 1.0 % 0.9 % (0.1) pts   1.1 % 1.0 % (0.1) pts  

 
 
 
 

* Operating statistics are reported on a consolidated basis, except where otherwise noted.

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 11





     Bell Canada Segment
Statistical Data - Historical Trend*

  Total
2003
  Q4 03   Q3 03   Q2 03   Q1 03   Total
2002
  Q4 02   Q3 02   Q2 02   Q1 02  

 
 
Wireline                                        
Local                                        
Network access services (k)                                        
      Residential     8,511   8,539   8,504   8,566       8,573   8,580   8,532   8,613  
      Business     4,540   4,549   4,564   4,577       4,581   4,607   4,630   4,633  
     
     
 
Total network access services     13,051   13,088   13,068   13,143       13,154   13,187   13,162   13,246  
                                         
Estimated percentage of wireline NAS - Ontario and Quebec(7)                                        
      Residential     96.9 % 97.3 % 97.6 % 97.9 %     97.9 % 98.0 % 98.3 % 98.7 %
      Business     90.4 % 90.3 % 90.6 % 91.0 %     91.3 % 91.5 % 91.6 % 91.8 %
     
     
 
Total estimated percentage of wireline NAS     94.6 % 94.8 % 95.1 % 95.4 %     95.5 % 95.7 % 95.9 % 96.2 %
                                         
SmartTouch feature revenues ($M) 931   233   234   233   231   923   231   230   230   232  
                                         
Long Distance (LD)                                        
Conversation minutes (M) 19,132   4,685   4,664   4,911   4,872   19,034   5,000   4,660   4,725   4,649  
Average revenue per minute ($) 0.124   0.122   0.128   0.120   0.124   0.126   0.120   0.130   0.126   0.128  
Estimated percentage of traditional wireline LD revenues - Ontario                                        
   and Quebec (8)     62.9 % 63.7 % 63.1 % 63.1 %     63.0 % 63.5 % 62.8 % 63.0 %

 
 
Data                                        
Data revenues ($M)(9)                                        
      Legacy 1,644   387   417   413   427   1,864   486   451   453   474  
      Non-Legacy 2,147   585   514   542   506   1,906   538   457   480   431  
 
 
 
  3,791   972   931   955   933   3,770   1,024   908   933   905  
                                         
Equivalent access lines(10) (k) - Bell Canada only                                        
Digital equivalent access lines     3,867   3,771   3,708   3,704       3,683   3,645   3,833   3,815  
Broadband equivalent access lines     16,651   15,393   14,658   13,808       12,568   11,265   10,176   9,431  
                                         
Internet subscribers(11) (k)                                        
DSL High Speed Internet subscribers (k)     1,482   1,391   1,287   1,206       1,110   1,002   909   866  
Dial-up Internet subscribers (k)     869   892   911   940       957   985   1,031   1,036  
     
     
 
      2,351   2,283   2,198   2,146       2,067   1,987   1,940   1,902  

 
 
Wireless                                        
Cellular & PCS Net activations (k)                                        
      Pre-paid 101   33   23   27   18   -   19   (5 ) (29 ) 15  
      Post-paid 413   156   101   104   52   452   196   63   117   76  
 
 


 
  514   189   124   131   70   452   215   58   88   91  
Cellular & PCS subscribers (k)                                        
      Pre-paid     1,059   1,026   1,003   976       958   939   944   973  
      Post-paid     3,353   3,197   3,096   2,992       2,940   2,744   2,681   2,564  
     
     
 
      4,412   4,223   4,099   3,968       3,898   3,683   3,625   3,537  
                                         
Average revenue per unit ($/month) 48   50   50   48   45   47   47   48   47   44  
      Pre-paid 12   12   13   12   11   12   10   13   13   11  
      Post-paid 60   62   62   60   56   59   60   60   59   56  
                                         
Churn (%) (average per month) 1.4 % 1.4 % 1.4 % 1.4 % 1.4 % 1.7 % 1.7 % 1.8 % 1.6 % 1.6 %
      Pre-paid 1.9 % 1.8 % 1.8 % 1.9 % 1.9 % 2.2 % 2.7 % 2.2 % 1.9 % 1.8 %
      Post-paid 1.3 % 1.2 % 1.3 % 1.3 % 1.3 % 1.5 % 1.4 % 1.6 % 1.4 % 1.5 %
                                         
                                         
Usage per subscriber (min/month) 228   240   231   237   203   204   214   207   206   188  
Cost of acquisition(12) ($/sub) 426   445   425   435   387   429   409   441   471   407  
Wireless EBITDA 918   229   251   219   219   754   151   219   206   178  
Wireless EBITDA margins 36.3 % 34.0 % 38.0 % 35.3 % 38.4 % 34.2 % 26.0 % 38.4 % 37.6 % 35.3 %
                                         
Browser hits (M) 653   190   170   170   123   392   99   87   94   112  
                                         
Paging subscribers (k)     524   549   581   606       639   660   680   694  
Paging average revenue per unit ($/month) 10   10   10   10   10   10   10   10   10   10  

 
 
Bell ExpressVu (Direct-to-Home Satellite Service)                                        
Total subscribers (k)     1,387   1,352   1,335   1,317       1,304   1,221   1,176   1,145  
Net subscriber activations (k) 83   35   17   18   13   235   83   45   31   76  
Average revenue per subscriber ($/month) 46   48   47   47   44   44   43   43   44   45  
Cost of acquisition ($/sub) 671   735   613   655   675   690   667   630   769   718  
Churn (%) (average per month) 1.1 % 1.0 % 1.4 % 1.1 % 1.0 % 1.0 % 0.9 % 1.2 % 1.0 % 0.8 %

 
 

* Operating statistics are reported on a consolidated basis, except where otherwise noted.

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 12






Accompanying Notes

(1) Effective December 2003, we started presenting the financial results of Aliants remote communications segment which consisted mainly of Aliants investment in Stratos Global Corporation (Stratos), and BCE Emergis US Health operations (US Health) as discontinued operations. Stratos results were previously presented in the Bell Canada Segment and US Health results were previously presented in the BCE Emergis segment. As a result, prior periods have been restated to reflect the discontinued operations treatment of Stratos and US Health.
   
(2)

Non-GAAP financial Measures

Certain financial measures used in this Supplementary Financial Information do not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP). Below you will find a discussion of these non-GAAP financial measures, as well as a reconciliation to the most comparable GAAP measure.

EBITDA

The term EBITDA (earnings before interest, taxes, depreciation and amortization) does not have any standardized meaning prescribed by Canadian GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. We define it as operating revenues less operating expenses, which means it represents operating income before amortization expense, net benefit plans (cost) credit and restructuring and other charges. EBITDA is presented on a basis that is consistent from period to period.

We believe EBITDA to be an important measure as it allows us to assess the operating performance of our ongoing businesses without the effects of amortization expense, net benefit plans (cost) credit and restructuring and other charges. We exclude amortization expense and net benefit plans (cost) credit because they substantially 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 companys pension plans. We exclude restructuring and other charges because they are transitional in nature.

EBITDA allows us to compare our operating performance on a consistent basis. We also believe that EBITDA is used by certain investors and analysts in measuring a companys ability to service debt and to meet other payment obligations or as the basis for a valuation measurement that is commonly used in the telecommunications industry.

EBITDA should not be confused with net cash flows from operating activities. The most comparable Canadian GAAP earnings measure is operating income. The following is a reconciliation of EBITDA to operating income on a consolidated and segmented basis.


(in $ millions) Bell
Canada
Bell
Globe-
media
BCE
Emergis
BCE
Ventures
Corpo-
rate and
other
BCE
Consoli-
dated

Q4 2003            
             
EBITDA 1 731 83 6 91 (57) 1 854
Amortization expense (742) (14) (10) (34) 14 (786)
Net benefit plans (cost) credit (46) (3) - - 3 (46)
Restructuring and other charges (13) - (38) - - (51)

Operating income (loss) 930 66 (42) 57 (40) 971

Q4 2002            
             
EBITDA 1 690 72 10 71 (36) 1 807
Amortization expense (734) (16) (12) (28) 17 (773)
Net benefit plans (cost) credit 9 - - - (1) 8
Restructuring and other charges (302) - - - (93) (395)

Operating income (loss) 663 56 (2) 43 (113) 647

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 13






Accompanying Notes (continued)

(in $ millions) Bell
Canada
Bell
Globe-
media
BCE
Emergis
BCE
Ventures
Corpo-
rate and
other
BCE
Consoli-
dated

Full Year 2003            
             
EBITDA 7 001 233 15 347 (170) 7 426
Amortization expense (2 970) (60) (46) (126) 55 (3 147)
Net benefit plans (cost) credit (181) (6) - - 12 (175)
Restructuring and other charges (14) - (38) - - (52)

Operating income (loss) 3 836 167 (69) 221 (103) 4 052

             
Full Year 2002            
             
EBITDA 7 079 180 (29) 287 (162) 7 355
Amortization expense (2 894) (67) (58) (121) 58 (3 082)
Net benefit plans (cost) credit 38 (3) - - (2) 33
Restructuring and other charges (675) - (119) - (93) (887)

Operating income (loss) 3 548 110 (206) 166 (199) 3 419

Free Cash Flow
The term free cash flow does not have any standardized meaning prescribed by Canadian GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. We define it as cash from operating activities less capital expenditures, total dividends and other investing activities. Free cash flow is presented on a basis that is consistent from period to period. We consider free cash flow as an important indicator of the financial strength and performance of our business as it demonstrates the cash available to repay debt and reinvest in our company. We believe that free cash flow is also used by certain investors and analysts in valuing a business and its underlying assets. The most comparable Canadian GAAP financial measure is cash from operating activities. The following is a reconciliation of free cash flow to cash from operating activities on a consolidated basis:

(in $ millions) Q4 2003 Q4 2002 FY 2003 FY 2002

Cash from operating activities 1 610 1 138 6 015 4 378
Capital expenditures (1 083) (1 066) (3 179) (3 731)
Other investing activities (7) (1) 64 13
Preferred dividends and dividends paid        
   by subsidiaries to non-controlling interest (69) (160) (245) (511)

Free cash flow from operations, before common dividends 451 (89) 2 655 149
Common dividends (259) (271) (1 029) (999)

Free cash flow from operations, after common dividends 192 (360) 1 626 (850)

(3) Cash flow per share is calculated as follows:

Cash flow from operations less capital expenditures
Average number of common shares outstanding during the period
   
(4)

Annualized cash flow yield is calculated as follows:

Free cash flow before common dividends, investments and divestitures
Number of common shares outstanding at end of period multiplied by share price at end of period

 

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 14






Accompanying Notes (continued)

(5) Reflects an increase in the Bell Canada Segment 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 ($6 million in Q4 2003, $24 million YTD) over the remaining terms of the related long-term debt.
   
(6) At the BCE Consolidated level, 3rd Party Preferred Shares reflected in the financial statements of subsidiaries are included in non-controlling interest within the liabilities section of the balance sheet.
   
(7) Bell Canadas estimated percentage of wireline NAS reflects losses to facilities-based competition only.
   
(8) Represents Bell Canadas estimated percentage of traditional wireline revenues in Ontario and Quebec reflecting 1+, toll-free and calling card traffic. This measure does not include Bell Canadas share of long distance traffic originating through the use of dial-around services, prepaid cards and cellular and PCS services.
   
(9) Legacy data revenues include digital transmission services such as MEGALINK TM, network access and Integrated Services Digital Network (ISDN) and Data, as well as, competitive network services and the sale of inter-networking equipment.

Non-legacy data revenues include national and regional IP data, Internet and e-commerce.
   
(10) 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
   
(11) DSL High Speed Internet subscribers include consumer, business and wholesale. Dial-up Internet subscribers include consumer and business.
   
(12) 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.

 

BCE Inc. Supplementary Financial Information - Fourth Quarter 2003 Page 15


 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

  BCE Inc.  

 

 

 

(signed) Michael T. Boychuk






  Michael T. Boychuk
Senior Vice-President and Treasurer
 
  Date: February 5, 2004