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BCE BCE

Filed: 4 Feb 21, 2:03pm

Exhibit 99.2

 

LOGO

Supplementary Financial Information Fourth Quarter 2020 BCE Investor Relations Thane Fotopoulos 514-870-4619 thane.fotopoulos@bell.ca


BCE (1) (2) (3)

Consolidated Operational Data

 

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

Q4 

2020 

 

Q4

2019

   

$ change

 % change   

TOTAL 

2020 

 

TOTAL

2019

   $ change % change

Operating revenues

             

Service

  5,090   5,235    (145  (2.8%   19,832   20,566    (734  (3.6%

Product

  1,012   1,040    (28  (2.7%   3,051   3,227    (176  (5.5%

Total operating revenues

  6,102   6,275    (173  (2.8%   22,883   23,793    (910  (3.8%

Operating costs (A)

  (3,633  (3,731   98   2.6%    (13,007  (13,541   534   3.9% 

Post-employment benefit plans service cost

  (65  (60   (5  (8.3%   (269  (246   (23  (9.3%

Adjusted EBITDA (4)

  2,404   2,484    (80  (3.2%   9,607   10,006    (399  (4.0%

Adjusted EBITDA margin (4)

  39.4%   39.6%     (0.2) pts    42.0%   42.1%     (0.1) pts 

Severance, acquisition and other costs

  (52  (28   (24  (85.7%   (116  (114   (2  (1.8%

Depreciation

  (872  (854   (18  (2.1%   (3,475  (3,458   (17  (0.5%

Amortization

  (233  (224   (9  (4.0%   (929  (886   (43  (4.9%

Finance costs

             

Interest expense

  (274  (285   11   3.9%    (1,110  (1,125   15   1.3% 

Interest on post-employment benefit obligations

  (11  (16   5   31.3%    (46  (63   17   27.0% 

Impairment of assets

  (12  (96   84   87.5%    (472  (102   (370  n.m. 

Other (expense) income

  (38  (18   (20  n.m.    (194  95    (289  n.m. 

Income taxes

  (191  (245   54   22.0%    (792  (1,129   337   29.8% 
Net earnings from continuing operations  721   718    3   0.4%    2,473   3,224    (751  (23.3%

Net earnings from discontinued operations

  211   5    206   n.m.    226   29    197   n.m. 

Net earnings

  932   723    209   28.9%    2,699   3,253    (554  (17.0%
  

Net earnings from continuing operations attributable to:

             

Common shareholders

  678   667    11   1.6%    2,272   3,011    (739  (24.5%

Preferred shareholders

  32   38    (6  (15.8%   136   151    (15  (9.9%

Non-controlling interest

  11   13    (2  (15.4%   65   62    3   4.8% 

Net earnings from continuing operations

  721   718    3   0.4%    2,473   3,224    (751  (23.3%
  

Net earnings attributable to:

             

Common shareholders

  889   672    217   32.3%    2,498   3,040    (542  (17.8%

Preferred shareholders

  32   38    (6  (15.8%   136   151    (15  (9.9%

Non-controlling interest

  11   13    (2  (15.4%   65   62    3   4.8% 

Net earnings

  932   723    209   28.9%    2,699   3,253    (554  (17.0%
  
Net earnings per common share - basic and diluted             

Continuing operations

 $0.75  $0.73   $0.02   2.7%   $2.51  $3.34   $(0.83  (24.9%

Discontinued operations

 $0.23  $0.01   $0.22   n.m.   $0.25  $0.03   $0.22   n.m. 
Net earnings per common share - basic and diluted $0.98  $0.74   $0.24   32.4%   $2.76  $3.37   $(0.61  (18.1%
  

Dividends per common share

 $    0.8325  $    0.7925   $      0.04         5.0%   $    3.3300  $    3.1700   $      0.16         5.0% 
  
Weighted average number of common shares outstanding - basic (millions)  904.4   903.8       904.3   900.8    
Weighted average number of common shares outstanding - diluted (millions)  904.4   904.8       904.4   901.4    

Number of common shares outstanding (millions)

  904.4   903.9             904.4   903.9          
  

Adjusted net earnings and EPS

                                   

Net earnings attributable to common shareholders

  889   672    217   32.3%    2,498   3,040    (542  (17.8%

Severance, acquisition and other costs

  38   20    18   90.0%    85   83    2   2.4% 
Net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans  -   45    (45  (100.0%   37   (101   138   n.m. 

Net (gains) losses on investments

  (3  (18   15   (83.3%   (46  39    (85  n.m. 

Early debt redemption costs

  9   -    9   n.m.    37   13    24   n.m. 

Impairment of assets

  9   70    (61  (87.1%   345   74    271   n.m. 

Net earnings from discontinued operations

  (211  (5   (206  n.m.    (226  (29   (197  n.m. 

Adjusted net earnings (4)

  731   784    (53  (6.8%   2,730   3,119    (389  (12.5%

Adjusted EPS (4)

 $0.81  $0.86   $(0.05  (5.8%  $3.02  $3.46   $(0.44  (12.7%

n.m. : not meaningful

(A) Excludes post-employment benefit plans service cost

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 2


BCE

Consolidated Operational Data - Historical Trend

 

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

TOTAL

2020

 

 

   Q4 20   Q3 20   Q2 20   Q1 20    

TOTAL

2019

 

 

   Q4 19   Q3 19   Q2 19   Q1 19 

Operating revenues

             

Service

  19,832    5,090   4,924   4,800   5,018    20,566    5,235   5,141   5,190   5,000 

Product

  3,051    1,012   863   554   622    3,227    1,040   799   699   689 

Total operating revenues

  22,883    6,102   5,787   5,354   5,640    23,793    6,275   5,940   5,889   5,689 

Operating costs (A)

  (13,007   (3,633  (3,268  (2,959  (3,147   (13,541   (3,731  (3,312  (3,259  (3,239

Post-employment benefit plans service cost

  (269   (65  (65  (64  (75   (246   (60  (60  (58  (68

Adjusted EBITDA

  9,607    2,404   2,454   2,331   2,418    10,006    2,484   2,568   2,572   2,382 

Adjusted EBITDA margin

  42.0%    39.4%   42.4%   43.5%   42.9%    42.1%    39.6%   43.2%   43.7%   41.9% 

Severance, acquisition and other costs

  (116   (52  (26  (22  (16   (114   (28  (23  (39  (24

Depreciation

  (3,475   (872  (876  (869  (858   (3,458   (854  (852  (879  (873

Amortization

  (929   (233  (232  (234  (230   (886   (224  (225  (220  (217

Finance costs

             

Interest expense

  (1,110   (274  (279  (280  (277   (1,125   (285  (280  (279  (281

Interest on post-employment benefit obligations

  (46   (11  (12  (11  (12   (63   (16  (16  (15  (16

Impairment of assets

  (472   (12  (4  (449  (7   (102   (96  (1  (1  (4

Other (expense) income

  (194   (38  (29  (80  (47   95    (18  62   (54  105 

Income taxes

  (792   (191  (262  (96  (243   (1,129   (245  (319  (275  (290
Net earnings from continuing operations  2,473    721   734   290   728    3,224    718   914   810   782 

Net earnings from discontinued operations

  226    211   6   4   5    29    5   8   7   9 

Net earnings

  2,699    932   740   294   733    3,253    723   922   817   791 
Net earnings from continuing operations attributable to:             

Common shareholders

  2,272    678   686   233   675    3,011    667   859   754   731 

Preferred shareholders

  136    32   32   34   38    151    38   37   38   38 

Non-controlling interest

  65    11   16   23   15    62    13   18   18   13 

Net earnings from continuing operations

  2,473    721   734   290   728    3,224    718   914   810   782 

Net earnings attributable to:

             

Common shareholders

  2,498    889   692   237   680    3,040    672   867   761   740 

Preferred shareholders

  136    32   32   34   38    151    38   37   38   38 

Non-controlling interest

  65    11   16   23   15    62    13   18   18   13 

Net earnings

  2,699    932   740   294   733    3,253    723   922   817   791 
Net earnings per common share - basic and diluted             

Continuing operations

 $2.51   $0.75  $0.76  $0.26  $0.74   $3.34   $0.73  $0.96  $0.84  $0.81 

Discontinued operations

 $0.25   $0.23  $0.01  $-  $0.01   $0.03   $0.01  $-  $0.01  $0.01 
Net earnings per common share - basic and diluted $2.76   $0.98  $0.77  $0.26  $0.75   $3.37   $0.74  $0.96  $0.85  $0.82 
Dividends per common share $  3.3300   $  0.8325  $  0.8325  $  0.8325  $  0.8325   $  3.1700   $  0.7925  $  0.7925  $  0.7925  $  0.7925 
Weighted average number of common shares outstanding - basic (millions)  904.3    904.4   904.3   904.3   904.1    900.8    903.8   901.4   899.5   898.4 
Weighted average number of common shares outstanding - diluted (millions)  904.4    904.4   904.4   904.4   904.5    901.4    904.8   902.2   900.3   898.7 
Number of common shares outstanding (millions)  904.4    904.4   904.3   904.3   904.3    903.9    903.9   903.7   900.1   898.8 
Adjusted net earnings and EPS                                           
Net earnings attributable to common shareholders  2,498    889   692   237   680    3,040    672   867   761   740 
Severance, acquisition and other costs  85    38   19   16   12    83    20   17   28   18 
Net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans  37    -   10   7   20    (101   45   (64  (9  (73
Net (gains) losses on investments  (46   (3  (22  (11  (10   39    (18  -   53   4 
Early debt redemption costs  37    9   16   -   12    13    -   -   13   - 
Impairment of assets  345    9   3   328   5    74    70   -   1   3 
Net earnings from discontinued operations  (226   (211  (6  (4  (5   (29   (5  (8  (7  (9
Adjusted net earnings  2,730    731   712   573   714    3,119    784   812   840   683 
Adjusted EPS $3.02   $0.81  $0.79  $0.63  $0.79   $3.46   $0.86  $0.91  $0.93  $0.76 

(A) Excludes post-employment benefit plans service cost

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 3


BCE (1) (2) (3)

Segmented Data

 

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

Q4

        2020

  

Q4

2019

      $ change  % change      

    TOTAL

2020

  

      TOTAL

2019

      $ change  % change 
                 

Operating revenues

                 

Bell Wireless

   2,408   2,454     (46  (1.9%    8,683   9,001     (318  (3.5%

Bell Wireline

   3,095   3,135     (40  (1.3%    12,206   12,317     (111  (0.9%

Bell Media

   791   879     (88  (10.0%)     2,750   3,217     (467  (14.5%

Inter-segment eliminations

   (192  (193    1   0.5%     (756  (742    (14  (1.9%) 

Total

   6,102   6,275     (173  (2.8%)     22,883   23,793     (910  (3.8%
                 

Operating costs

                 

Bell Wireless

   (1,505  (1,523    18   1.2%     (5,017  (5,210    193   3.7% 

Bell Wireline

   (1,783  (1,787    4   0.2%     (6,960  (6,952    (8  (0.1%

Bell Media

   (602  (674    72   10.7%     (2,055  (2,367    312   13.2% 

Inter-segment eliminations

   192   193     (1  (0.5%)     756   742     14   1.9% 

Total

   (3,698  (3,791    93   2.5%     (13,276  (13,787    511   3.7% 
                 

Adjusted EBITDA

                 

Bell Wireless

   903   931     (28  (3.0%)     3,666   3,791     (125  (3.3%

Margin

   37.5%   37.9%      (0.4) pts     42.2%   42.1%      0.1 pts 

Bell Wireline

   1,312   1,348     (36  (2.7%)     5,246   5,365     (119  (2.2%

Margin

   42.4%   43.0%      (0.6) pts     43.0%   43.6%      (0.6) pts 

Bell Media

   189   205     (16  (7.8%)     695   850     (155  (18.2%

Margin

   23.9%   23.3%         0.6 pts     25.3%   26.4%         (1.1) pts 

Total

   2,404   2,484     (80  (3.2%)     9,607   10,006     (399  (4.0%

Margin

   39.4%           39.6%      (0.2) pts     42.0%   42.1%      (0.1) pts 
                 

Capital expenditures

                 

Bell Wireless

   392   203     (189  (93.1%)     916   671     (245  (36.5%) 

Capital intensity (5)

   16.3%   8.3%      (8.0) pts     10.5%   7.5%      (3.0) pts 

Bell Wireline

   1,053   910     (143  (15.7%)     3,161   3,195     34   1.1% 

Capital intensity

   34.0%   29.0%      (5.0) pts     25.9%   25.9%      - 

Bell Media

   49   37     (12  (32.4%)     125   108     (17  (15.7%

Capital intensity

   6.2%   4.2%         (2.0) pts     4.5%   3.4%         (1.1) pts 

Total

   1,494   1,150     (344  (29.9%)     4,202   3,974     (228  (5.7%

Capital intensity

   24.5%   18.3%      (6.2) pts     18.4%   16.7%      (1.7) pts 

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 4


BCE

Segmented Data - Historical Trend

 

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

  TOTAL

2020

      Q4 20  Q3 20  Q2 20  Q1 20      

    TOTAL

2019

      Q4 19  Q3 19  Q2 19  Q1 19 
                 

Operating revenues

                 

Bell Wireless

   8,683     2,408   2,318   1,922   2,035     9,001     2,454   2,310   2,160   2,077 

Bell Wireline

   12,206     3,095   3,032   3,043   3,036     12,317     3,135   3,057   3,073   3,052 

Bell Media

   2,750     791   628   579   752     3,217     879   751   842   745 

Inter-segment eliminations

   (756    (192  (191  (190  (183    (742    (193  (178  (186  (185

Total

   22,883     6,102   5,787   5,354   5,640     23,793     6,275   5,940   5,889   5,689 
                 

Operating costs

                 

Bell Wireless

   (5,017    (1,505  (1,362  (1,043  (1,107    (5,210    (1,523  (1,310  (1,192  (1,185

Bell Wireline

   (6,960    (1,783  (1,712  (1,764  (1,701    (6,952    (1,787  (1,715  (1,723  (1,727

Bell Media

   (2,055    (602  (450  (406  (597    (2,367    (674  (525  (588  (580

Inter-segment eliminations

   756     192   191   190   183     742     193   178   186   185 

Total

   (13,276    (3,698  (3,333  (3,023  (3,222    (13,787    (3,791  (3,372  (3,317  (3,307
                 

Adjusted EBITDA

                 

Bell Wireless

   3,666     903   956   879   928     3,791     931   1,000   968   892 

Margin

   42.2%     37.5%   41.2%   45.7%   45.6%     42.1%     37.9%   43.3%   44.8%   42.9% 

Bell Wireline

   5,246     1,312   1,320   1,279   1,335     5,365     1,348   1,342   1,350   1,325 

Margin

   43.0%     42.4%   43.5%   42.0%   44.0%     43.6%     43.0%   43.9%   43.9%   43.4% 

Bell Media

   695     189   178   173   155     850     205   226   254   165 

Margin

   25.3%     23.9%   28.3%   29.9%   20.6%     26.4%     23.3%   30.1%   30.2%   22.1% 

Total

   9,607     2,404   2,454   2,331   2,418     10,006     2,484   2,568   2,572   2,382 

Margin

   42.0%     39.4%   42.4%   43.5%   42.9%     42.1%     39.6%   43.2%   43.7%   41.9% 
                 

Capital expenditures

                 

Bell Wireless

   916     392   212   182   130     671     203   161   159   148 

Capital intensity

   10.5%     16.3%   9.1%   9.5%   6.4%     7.5%     8.3%   7.0%   7.4%   7.1% 

Bell Wireline

   3,161     1,053   792   694   622     3,195     910   826   784   675 

Capital intensity

   25.9%     34.0%   26.1%   22.8%   20.5%     25.9%     29.0%   27.0%   25.5%   22.1% 

Bell Media

   125     49   27   24   25     108     37   22   24   25 

Capital intensity

   4.5%     6.2%   4.3%   4.1%   3.3%     3.4%     4.2%   2.9%   2.9%   3.4% 

Total

   4,202     1,494   1,031   900   777     3,974     1,150   1,009   967   848 

Capital intensity

   18.4%     24.5%   17.8%   16.8%   13.8%     16.7%     18.3%   17.0%   16.4%   14.9% 

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 5


Bell Wireless (1) (3)

 

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

Q4

2020

 

 

  

Q4

2019

 

 

  


 

 

 

   % change   


 

 

 

   

TOTAL

2020

 

 

  

TOTAL

2019

 

 

  


 

 

 

   % change 

Bell Wireless

               

Operating revenues

               

External service revenues

   1,543   1,582     (2.5%)     6,122   6,323     (3.2%

Inter-segment service revenues

   11   12     (8.3%)     47   49     (4.1%) 

Total operating service revenues

   1,554   1,594     (2.5%)     6,169   6,372     (3.2%) 

External product revenues

   851   857     (0.7%)     2,508   2,623     (4.4%) 

Inter-segment product revenues

   3   3     -     6   6     - 

Total operating product revenues

   854   860     (0.7%)     2,514   2,629     (4.4%) 

Total external revenues

   2,394   2,439     (1.8%)     8,630   8,946     (3.5%) 

Total operating revenues

   2,408   2,454     (1.9%)     8,683   9,001     (3.5%) 

Operating costs

   (1,505  (1,523    1.2%     (5,017  (5,210    3.7% 

Adjusted EBITDA

   903   931     (3.0%)     3,666   3,791     (3.3%) 

Adjusted EBITDA margin (Total operating revenues)

   37.5%   37.9%     (0.4) pts     42.2%   42.1%     0.1 pts 
  

Capital expenditures

   392   203     (93.1%)     916   671     (36.5%) 

Capital intensity

   16.3%   8.3%     (8.0) pts     10.5%   7.5%     (3.0) pts 

Wireless subscriber gross activations (5)

   512,219   596,019     (14.1%)     1,805,732   2,117,517     (14.7%) 
  

Postpaid

   394,948   455,111     (13.2%)     1,286,307   1,568,729     (18.0%) 
  

Prepaid

   117,271   140,908     (16.8%)     519,425   548,788     (5.4%) 
  

Wireless subscriber net activations (losses)

   81,256   123,582     (34.2%)     263,721   515,409     (48.8%) 
  

Postpaid

   92,928   121,599     (23.6%)     225,739   401,955     (43.8%) 
  

Prepaid

   (11,672  1,983     n.m.     37,982   113,454     (66.5%) 
  

Wireless subscribers end of period (EOP)

     10,221,683       9,957,962     2.6%       10,221,683       9,957,962     2.6% 
  

Postpaid

   9,385,679   9,159,940     2.5%     9,385,679   9,159,940     2.5% 
  

Prepaid

   836,004   798,022     4.8%     836,004   798,022     4.8% 
       

Blended average billing per user (ABPU)($/month) (5) (A)

   64.71   67.35     (3.9%)     64.69   68.36     (5.4%) 
  

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

   1.41%   1.60%          0.19 pts     1.28%   1.39%          0.11 pts 
  

Postpaid

   1.11%   1.28%     0.17 pts     0.99%   1.13%     0.14 pts 
  

Prepaid

   4.79%   5.14%     0.35 pts     4.60%   4.44%     (0.16) pts 

n.m. : not meaningful

(A) 

In Q1 2020, we updated our definition of ABPU to include monthly billings related to device financing receivables owing from customers on contract. Consequently, we restated previously reported 2019 ABPU for comparability. See Note 5, Key performance indicators (KPIs), for the definition of ABPU.

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 6


Bell Wireless - Historical Trend

 

(In millions of Canadian dollars, except where

otherwise indicated) (unaudited)

 

TOTAL

2020

     Q4 20  Q3 20  Q2 20  Q1 20     

TOTAL

2019

     Q4 19  Q3 19  Q2 19  Q1 19 

Bell Wireless

             

Operating revenues

             

External service revenues

  6,122    1,543   1,563   1,481   1,535    6,323    1,582   1,633   1,580   1,528 

Inter-segment service revenues

  47    11   12   12   12    49    12   13   12   12 
Total operating service revenues  6,169    1,554   1,575   1,493   1,547    6,372    1,594   1,646   1,592   1,540 

External product revenues

  2,508    851   742   428   487    2,623    857   664   566   536 

Inter-segment product revenues

  6    3   1   1   1    6    3   -   2   1 
Total operating product revenues  2,514    854   743   429   488    2,629    860   664   568   537 
Total external revenues  8,630    2,394   2,305   1,909   2,022    8,946    2,439   2,297   2,146   2,064 
Total operating revenues  8,683    2,408   2,318   1,922   2,035    9,001    2,454   2,310   2,160   2,077 
Operating costs  (5,017   (1,505  (1,362  (1,043  (1,107   (5,210   (1,523  (1,310  (1,192  (1,185
Adjusted EBITDA  3,666    903   956   879   928    3,791    931   1,000   968   892 
Adjusted EBITDA margin (Total operating revenues)  42.2%    37.5%   41.2%   45.7%   45.6%    42.1%    37.9%   43.3%   44.8%   42.9% 
Capital expenditures  916    392   212   182   130    671    203   161   159   148 
Capital intensity  10.5%    16.3%   9.1%   9.5%   6.4%    7.5%    8.3%   7.0%   7.4%   7.1% 
Wireless subscriber gross activations  1,805,732    512,219   514,384   372,710   406,419    2,117,517    596,019   593,547   517,650   410,301 

Postpaid

  1,286,307    394,948   365,781   243,166   282,412    1,568,729    455,111   417,966   375,094   320,558 

Prepaid

  519,425    117,271   148,603   129,544   124,007    548,788    140,908   175,581   142,556   89,743 
Wireless subscriber net activations (losses)  263,721    81,256   128,168   34,702   19,595    515,409    123,582   204,067   149,478   38,282 

Postpaid

  225,739    92,928   87,529   21,632   23,650    401,955    121,599   127,172   102,980   50,204 

Prepaid

  37,982    (11,672  40,639   13,070   (4,055   113,454    1,983   76,895   46,498   (11,922
Wireless subscribers EOP  10,221,683      10,221,683     10,140,427     10,012,259     9,977,557      9,957,962      9,957,962     9,834,380     9,630,313     9,480,835 

Postpaid

  9,385,679    9,385,679   9,292,751   9,205,222   9,183,590    9,159,940    9,159,940   9,038,341   8,911,169   8,808,189 

Prepaid

  836,004    836,004   847,676   807,037   793,967    798,022    798,022   796,039   719,144   672,646 
           

Blended ABPU ($/month)(A)

  64.69    64.71   65.74   62.77   65.53    68.36    67.35   69.94   68.79   67.35 
Churn (%)(average per month)  1.28%    1.41%   1.28%   1.13%   1.30%    1.39%    1.60%   1.34%   1.29%   1.31% 

Postpaid

  0.99%    1.11%   1.04%   0.82%   0.97%    1.13%    1.28%   1.12%   1.06%   1.07% 

Prepaid

  4.60%    4.79%   3.98%   4.63%   5.03%    4.44%    5.14%   3.89%   4.20%   4.49% 

 

(A) 

In Q1 2020, we updated our definition of ABPU to include monthly billings related to device financing receivables owing from customers on contract. Consequently, we restated previously reported 2019 ABPU for comparability. See Note 5, Key performance indicators (KPIs), for the definition of ABPU.

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 7


Bell Wireline (1) (2) (3)

 

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

Q4

2020

  

Q4

2019

     % change      

TOTAL

2020

  

TOTAL

2019

     % change 

Bell Wireline

           

Operating revenues

           

Data

  1,953   1,925    1.5%    7,691   7,617    1.0% 

Voice

  828   879    (5.8%)    3,402   3,564    (4.5%) 

Other services

  67   69    (2.9%)    248   251    (1.2%) 

Total external service revenues

  2,848   2,873    (0.9%)    11,341   11,432    (0.8%) 

Inter-segment service revenues

  85   79    7.6%    321   281    14.2% 

Total operating service revenues

  2,933   2,952    (0.6%)    11,662   11,713       (0.4%) 

Data

  148   166    (10.8%)    494   556    (11.2%) 

Equipment and other

  13   17    (23.5%)    49   48    2.1% 

Total external product revenues

  161   183    (12.0%)    543   604    (10.1%) 

Inter-segment product revenues

  1   -    n.m.    1   -    n.m. 

Total operating product revenues

  162   183    (11.5%)    544   604       (9.9%) 

Total external revenues

  3,009   3,056    (1.5%)    11,884   12,036    (1.3%) 

Total operating revenues

  3,095   3,135    (1.3%)    12,206   12,317    (0.9%) 

Operating costs

  (1,783  (1,787   0.2%    (6,960  (6,952   (0.1%) 

Adjusted EBITDA

  1,312   1,348    (2.7%)    5,246   5,365    (2.2%) 

Adjusted EBITDA margin

  42.4%   43.0%    (0.6) pts    43.0%   43.6%    (0.6) pts 
  

Capital expenditures

  1,053   910    (15.7%)    3,161   3,195    1.1% 

Capital intensity

  34.0%   29.0%    (5.0) pts    25.9%   25.9%    - 

Retail high-speed Internet subscribers (5)

           
  

Retail net activations

  44,512   35,639    24.9%    148,989   135,861    9.7% 
  

Retail subscribers EOP

  3,704,590   3,555,601    4.2%    3,704,590   3,555,601    4.2% 
  

Retail TV subscribers (5)

           
  

Retail net subscriber activations (losses)

  536   421    27.3%    (33,859  6,053    n.m. 
  

Internet protocol television (IPTV)

  21,106   22,039    (4.2%)    39,191   91,476    (57.2%) 
  

Satellite

  (20,570  (21,618   4.8%    (73,050  (85,423   14.5% 
  

Total retail subscribers EOP

  2,738,605   2,772,464    (1.2%)    2,738,605   2,772,464    (1.2%) 
  

IPTV

  1,806,373   1,767,182    2.2%    1,806,373   1,767,182    2.2% 
  

Satellite

  932,232   1,005,282    (7.3%)    932,232   1,005,282    (7.3%) 
  

Retail residential network access services (NAS) (5)

           
  

Retail residential NAS lines net losses

  (53,759  (58,110   7.5%    (213,551  (263,325   18.9% 
  

Retail residential NAS lines

  2,483,932   2,697,483    (7.9%)    2,483,932   2,697,483    (7.9%) 

n.m. : not meaningful

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 8


Bell Wireline - Historical Trend

 

(In millions of Canadian dollars, except where
otherwise indicated) (unaudited)
 TOTAL
2020
     Q4 20  Q3 20  Q2 20  Q1 20     TOTAL
2019
     Q4 19  Q3 19  Q2 19  Q1 19 

Bell Wireline

             

Operating revenues

             

Data

  7,691    1,953   1,931   1,916   1,891    7,617    1,925   1,912   1,914   1,866 

Voice

  3,402    828   839   863   872    3,564    879   881   897   907 

Other services

  248    67   61   58   62    251    69   61   62   59 

Total external service revenues

  11,341    2,848   2,831   2,837   2,825    11,432    2,873   2,854   2,873   2,832 

Inter-segment service revenues

  321    85   80   80   76    281    79   68   67   67 

Total operating service revenues

  11,662    2,933   2,911   2,917   2,901    11,713    2,952   2,922   2,940   2,899 

Data

  494    148   110   113   123    556    166   125   123   142 

Equipment and other

  49    13   11   13   12    48    17   10   10   11 

Total external product revenues

  543    161   121   126   135    604    183   135   133   153 

Inter-segment product revenues

  1    1   -   -   -    -    -   -   -   - 

Total operating product revenues

  544    162   121   126   135    604    183   135   133   153 

Total external revenues

  11,884    3,009   2,952   2,963   2,960    12,036    3,056   2,989   3,006   2,985 

Total operating revenues

  12,206    3,095   3,032   3,043   3,036    12,317    3,135   3,057   3,073   3,052 

Operating costs

  (6,960   (1,783  (1,712  (1,764  (1,701   (6,952   (1,787  (1,715  (1,723  (1,727

Adjusted EBITDA

  5,246    1,312   1,320   1,279   1,335    5,365    1,348   1,342   1,350   1,325 

Adjusted EBITDA margin

  43.0%    42.4%   43.5%   42.0%   44.0%    43.6%    43.0%   43.9%   43.9%   43.4% 

Capital expenditures

  3,161    1,053   792   694   622    3,195    910   826   784   675 

Capital intensity

  25.9%    34.0%   26.1%   22.8%   20.5%    25.9%    29.0%   27.0%   25.5%   22.1% 
Retail high-speed Internet subscribers             

Retail net activations

  148,989    44,512   62,859   19,023   22,595    135,861    35,639   58,137   19,414   22,671 

Retail subscribers EOP

  3,704,590    3,704,590   3,660,078   3,597,219   3,578,196    3,555,601    3,555,601   3,519,962   3,461,825   3,442,411 

Retail TV subscribers

             
Retail net subscriber (losses) activations  (33,859   536   (296  (15,544  (18,555   6,053    421   4,842   2,350   (1,560

IPTV

  39,191    21,106   18,837   (3,604  2,852    91,476    22,039   31,746   16,775   20,916 

Satellite

  (73,050   (20,570  (19,133  (11,940  (21,407   (85,423   (21,618  (26,904  (14,425  (22,476

Total retail subscribers EOP

  2,738,605    2,738,605   2,738,069   2,738,365   2,753,909    2,772,464    2,772,464   2,772,043   2,767,201   2,764,851 

IPTV

  1,806,373    1,806,373   1,785,267   1,766,430   1,770,034    1,767,182    1,767,182   1,745,143   1,713,397   1,696,622 

Satellite

  932,232    932,232   952,802   971,935   983,875    1,005,282    1,005,282   1,026,900   1,053,804   1,068,229 
Retail residential network access services (NAS)             
Retail residential NAS lines net losses  (213,551   (53,759  (49,792  (48,405  (61,595   (263,325   (58,110  (65,656  (72,780  (66,779

Retail residential NAS lines

  2,483,932    2,483,932   2,537,691   2,587,483   2,635,888    2,697,483    2,697,483   2,755,593   2,821,249   2,894,029 

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 9


BCE(2)

Net debt and other information

 

BCE - Net debt and preferred shares                             

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

 

                
                  December 31
2020
  September 30
2020
  June 30
2020
  

March 31

2020

  December 31
2019
 
   

Debt due within one year

       2,417   2,904   2,584   4,209   3,881 

Long-term debt

       23,906   24,914   25,024   25,513   22,415 

50% of preferred shares

       2,002   2,002   2,002   2,002   2,002 

Cash and cash equivalents

       (224  (1,679  (1,547  (2,679  (145

Net debt (4)

       28,101   28,141   28,063   29,045   28,153 
   

Net debt leverage ratio (4)

       2.93   2.91   2.86   2.89   2.81 

Adjusted EBITDA /net interest expense ratio (4)

       8.32   8.29   8.36   8.58   8.50 
                                         
          
Cash flow information                             
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)  Q4
        2020
  Q4
2019
  $ change  % change          TOTAL
2020
  TOTAL
2019
  $ change  % change 
    

Free cash flow (FCF) (4)

             

Cash flows from operating activities

    1,631   2,091   (460  (22.0%)   7,754   7,958   (204  (2.6%) 

Capital expenditures

    (1,494  (1,150  (344  (29.9%)   (4,202  (3,974  (228  (5.7%) 

Cash dividends paid on preferred shares

    (31  (37  6   16.2%   (132  (147  15   10.2% 

Cash dividends paid by subsidiaries to non-controlling interest

 

  (16  (14  (2  (14.3%)   (53  (65  12   18.5% 

Acquisition and other costs paid

    2   7   (5  (71.4%)   35   60   (25  (41.7%) 

Cash from discontinued operations (included in cash flows from operating activities)

 

  -   (23  23   100.0%   (54  (94  40   42.6% 

FCF

    92   874   (782  (89.5%)   3,348   3,738   (390  (10.4%) 
                                         
          
Cash flow information - Historical trend                             
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)     TOTAL
2020
  

Q4

2020

  

Q3

2020

  

Q2

2020

  

Q1

2020

  

TOTAL

2019

  

Q4

2019

  

Q3

2019

  

Q2

2019

  

Q1

2019

 
   

FCF

            

Cash flows from operating activities

  7,754   1,631   2,110   2,562   1,451   7,958   2,091   2,258   2,093   1,516 

Capital expenditures

  (4,202  (1,494  (1,031  (900  (777  (3,974  (1,150  (1,009  (967  (848

Cash dividends paid on preferred shares

  (132  (31  (32  (33  (36  (147  (37  (47  (37  (26

Cash dividends paid by subsidiaries to non-controlling interest

  (53  (16  (11  (12  (14  (65  (14  (12  (12  (27

Acquisition and other costs paid

  35   2   13   11   9   60   7   3   21   29 

Cash from discontinued operations (included in cash flows from operating activities)

  (54  -   (15  (17  (22  (94  (23  (24  (22  (25

FCF

  3,348   92   1,034   1,611   611   3,738   874   1,169   1,076   619 
                                         

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 10


BCE (2)

Consolidated Statements of Financial Position

 

(In millions of Canadian dollars, except where otherwise indicated)
(unaudited)
 December 31
2020
    September 30
2020
             June 30
2020
         March 31
2020
     December 31
2019
 

ASSETS

            

Current assets

            

Cash

  224    1,482     1,297     943     141 

Cash equivalents

  -    197     250     1,736     4 

Trade and other receivables

  3,528    2,945     2,812     2,990     3,038 

Inventory

  439    425     445     487     427 

Contract assets

  687    799     921     1,037     1,111 

Contract costs

  402    401     399     416     415 

Prepaid expenses

  209    264     301 ��   280     194 

Other current assets

  199    191     212     419     190 

Assets held for sale

  -    829     825     -     - 

Total current assets

  5,688    7,533     7,462     8,308     5,520 

Non-current assets

            

Contract assets

  256    273     328     452     533 

Contract costs

  362    351     341     363     368 

Property, plant and equipment

  27,513    27,057     26,840     27,432     27,636 

Intangible assets

  13,102    12,931     12,897     13,513     13,352 

Deferred tax assets

  106    142     123     90     98 

Investments in associates and joint ventures

  756    772     718     730     698 

Post-employment benefit assets

  1,277    895     764     2,613     558 

Other non-current assets

  1,001    1,116     1,167     1,347     716 

Goodwill

  10,604    10,552     10,551     10,667     10,667 

Total non-current assets

  54,977    54,089     53,729     57,207     54,626 

Total assets

  60,665    61,622     61,191     65,515     60,146 

LIABILITIES

            

Current liabilities

            

Trade payables and other liabilities

  3,935    3,566     3,341     3,335     3,954 

Contract liabilities

  717    699     723     725     683 

Interest payable

  222    190     229     192     227 

Dividends payable

  766    767     766     767     729 

Current tax liabilities

  214    292     287     186     303 

Debt due within one year

  2,417    2,904     2,584     4,209     3,881 

Liabilities held for sale

  -    159     205     -     - 

Total current liabilities

  8,271    8,577     8,135     9,414     9,777 

Non-current liabilities

            

Contract liabilities

  242    223     216     211     207 

Long-term debt

  23,906    24,914     25,024     25,513     22,415 

Deferred tax liabilities

  3,810    3,827     3,765     4,444     3,561 

Post-employment benefit obligations

  1,962    1,969     1,980     1,603     1,907 

Other non-current liabilities

  1,145    1,032     934     906     871 

Total non-current liabilities

  31,065    31,965     31,919     32,677     28,961 

Total liabilities

  39,336    40,542     40,054     42,091     38,738 

EQUITY

            

Equity attributable to BCE shareholders

            

Preferred shares

  4,003    4,004     4,004     4,004     4,004 

Common shares

  20,390    20,386     20,386     20,386     20,363 

Contributed surplus

  1,174    1,168     1,155     1,156     1,178 

Accumulated other comprehensive income

  103    258     386     528     161 

Deficit

  (4,681   (5,087    (5,142    (2,990    (4,632

Total equity attributable to BCE shareholders

  20,989    20,729     20,789     23,084     21,074 

Non-controlling interest

  340    351     348     340     334 

Total equity

  21,329    21,080     21,137     23,424     21,408 

Total liabilities and equity

  60,665    61,622     61,191     65,515     60,146 

Number of common shares outstanding (millions)

  904.4    904.3     904.3     904.3     903.9 

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 11


BCE (2)

Consolidated Cash Flow Data

 

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

Q4

2020

  

Q4

2019

     $ change     

TOTAL

2020

  

        TOTAL

2019

     $ change 
  

Net earnings from continuing operations

  721   718    3    2,473   3,224    (751
  

Adjustments to reconcile net earnings from continuing operations to cash flows from operating activities

           

Severance, acquisition and other costs

  52   28    24    116   114    2 

Depreciation and amortization

  1,105   1,078    27    4,404   4,344    60 

Post-employment benefit plans cost

  76   76    -    315   309    6 

Net interest expense

  269   280    (11   1,087   1,101    (14

Impairment of assets

  12   96    (84   472   102    370 

Losses on investments

  (3  (22   19    (3  (18   15 

Income taxes

  191   245    (54   792   1,129    (337

Contributions to post-employment benefit plans

  (78  (77   (1   (297  (290   (7

Payments under other post-employment benefit plans

  (17  (18   1    (61  (72   11 

Severance and other costs paid

  (19  (23   4    (78  (167   89 

Interest paid

  (235  (261   26    (1,112  (1,079   (33

Income taxes paid (net of refunds)

  (383  (221   (162   (846  (725   (121

Acquisition and other costs paid

  (2  (7   5    (35  (60   25 

Net change in operating assets and liabilities

  (58  176    (234   473   (48   521 

Cash from discontinued operations

  -   23    (23   54   94    (40

Cash flows from operating activities

          1,631           2,091    (460           7,754   7,958    (204

Capital expenditures

  (1,494  (1,150   (344   (4,202  (3,974   (228

Cash dividends paid on preferred shares

  (31  (37   6    (132  (147   15 

Cash dividends paid by subsidiaries to non-controlling interest

  (16  (14   (2   (53  (65   12 

Acquisition and other costs paid

  2   7    (5   35   60    (25

Cash from discontinued operations (included in cash flows from operating activities)

  -   (23   23    (54  (94   40 

Free cash flow

  92   874    (782   3,348   3,738    (390

Cash from discontinued operations (included in cash flows from operating activities)

  -   23    (23   54   94    (40

Business acquisitions

  (42  -    (42   (65  (51   (14

Acquisition and other costs paid

  (2  (7   5    (35  (60   25 

Acquisition of spectrum licences

  -   -    -    (86  -    (86

Other investing activities

  (12  (5   (7   (79  7    (86

Cash from (used in) discontinued operations (included in cash flows from investing activities)

  913   (7   920    892   (18   910 

Decrease in notes payable

  (524  (851   327    (1,641  (1,073   (568

Increase in securitized trade receivables

  23   100    (77   -   131    (131

Issue of long-term debt

  -   -    -    6,006   1,954    4,052 

Repayment of long-term debt

  (1,094  (196   (898   (5,003  (2,221   (2,782

Issue of common shares

  4   15    (11   26   240    (214

Purchase of shares for settlement of share-based payments

  (54  (42   (12   (263  (142   (121

Cash dividends paid on common shares

  (753  (716   (37   (2,975  (2,819   (156

Other financing activities

  (6  (7   1    (93  (54   (39

Cash used in discontinued operations (included in cash flows from financing activities)

  -   (2   2    (7  (6   (1
   (1,547  (1,695   148    (3,269  (4,018   749 

Net (decrease) increase in cash and cash equivalents

  (1,455  (821   (634   79   (280   359 

Cash and cash equivalents at beginning of period

  1,679   966    713    145   425    (280

Cash and cash equivalents at end of period

  224   145    79    224   145    79 

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 12


BCE

Consolidated Cash Flow Data - Historical Trend

 

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)  TOTAL
2020
    Q4 20 Q3 20 Q2 20 Q1 20    TOTAL
2019
    Q4 19 Q3 19 Q2 19 Q1 19

Net earnings from continuing operations

    2,473      721   734   290   728      3,224      718   914   810   782

Adjustments to reconcile net earnings from continuing operations to cash flows from operating activities

                              

Severance, acquisition and other costs

    116      52   26   22   16      114      28   23   39   24

Depreciation and amortization

    4,404      1,105   1,108   1,103   1,088      4,344      1,078   1,077   1,099   1,090

Post-employment benefit plans cost

    315      76   77   75   87      309      76   76   73   84

Net interest expense

    1,087      269   273   275   270      1,101      280   274   271   276

Impairment of assets

    472      12   4   449   7      102      96   1   1   4

Losses on investments

    (3)      (3)   -   -   -      (18)      (22)   -   -   4

Income taxes

    792      191   262   96   243      1,129      245   319   275   290

Contributions to post-employment benefit plans

    (297)      (78)   (69)   (71)   (79)      (290)      (77)   (62)   (70)   (81)

Payments under other post-employment benefit plans

    (61)      (17)   (15)   (12)   (17)      (72)      (18)   (17)   (19)   (18)

Severance and other costs paid

    (78)      (19)   (11)   (13)   (35)      (167)      (23)   (45)   (33)   (66)

Interest paid

    (1,112)      (235)   (321)   (240)   (316)      (1,079)      (261)   (284)   (269)   (265)

Income taxes paid (net of refunds)

    (846)      (383)   (236)   6   (233)      (725)      (221)   (88)   (127)   (289)

Acquisition and other costs paid

    (35)      (2)   (13)   (11)   (9)      (60)      (7)   (3)   (21)   (29)

Net change in operating assets and liabilities

    473      (58)   276   576   (321)      (48)      176   49   42   (315)

Cash from discontinued operations

    54      -   15   17   22      94      23   24   22   25

Cash flows from operating activities

    7,754      1,631   2,110   2,562   1,451      7,958      2,091   2,258   2,093   1,516

Capital expenditures

    (4,202)      (1,494)   (1,031)   (900)   (777)      (3,974)      (1,150)   (1,009)   (967)   (848)

Cash dividends paid on preferred shares

    (132)      (31)   (32)   (33)   (36)      (147)      (37)   (47)   (37)   (26)

Cash dividends paid by subsidiaries to non-controlling interest

    (53)      (16)   (11)   (12)   (14)      (65)      (14)   (12)   (12)   (27)

Acquisition and other costs paid

    35      2   13   11   9      60      7   3   21   29

Cash from discontinued operations (included in cash flows from operating activities)

    (54)      -   (15)   (17)   (22)      (94)      (23)   (24)   (22)   (25)

Free cash flow

    3,348      92   1,034   1,611   611      3,738      874   1,169   1,076   619

Cash from discontinued operations (included in cash flows from operating activities)

    54      -   15   17   22      94      23   24   22   25

Business acquisitions

    (65)      (42)   -   (23)   -      (51)      -   (1)   (50)   -

Acquisition and other costs paid

    (35)      (2)   (13)   (11)   (9)      (60)      (7)   (3)   (21)   (29)

Acquisition of spectrum licences

    (86)      -   (85)   -   (1)      -      -   -   -   -

Other investing activities

    (79)      (12)   (49)   (13)   (5)      7      (5)   4   32   (24)

Cash from (used in) discontinued operations (included in cash flows from investing activities)

    892      913   (6)   (8)   (7)      (18)      (7)   (4)   (5)   (2)

(Decrease) increase in notes payable

    (1,641)      (524)   317   (1,204)   (230)      (1,073)      (851)   (1,066)   277   567

Increase (decrease) in securitized trade receivables

    -      23   (23)   (400)   400      131      100   -   -   31

Issue of long-term debt

    6,006      -   750   1,975   3,281      1,954      -   549   1,405   -

Repayment of long-term debt

    (5,003)      (1,094)   (979)   (2,221)   (709)      (2,221)      (196)   (225)   (1,597)   (203)

Issue of common shares

    26      4   -   -   22      240      15   161   44   20

Purchase of shares for settlement of share-based payments

    (263)      (54)   (40)   (75)   (94)      (142)      (42)   (14)   (10)   (76)

Cash dividends paid on common shares

    (2,975)      (753)   (753)   (753)   (716)      (2,819)      (716)   (713)   (712)   (678)

Other financing activities

    (93)      (6)   (32)   (25)   (30)      (54)      (7)   (8)   (33)   (6)

Cash used in discontinued operations (included in cash flows from financing activities)

    (7)      -   (4)   (2)   (1)      (6)      (2)   (1)   (2)   (1)
     (3,269)      (1,547)   (902)   (2,743)   1,923      (4,018)      (1,695)   (1,297)   (650)   (376)

Net increase (decrease) in cash and cash equivalents

    79      (1,455)   132   (1,132)   2,534      (280)      (821)   (128)   426   243

Cash and cash equivalents at beginning of period

    145      1,679   1,547   2,679   145      425      966   1,094   668   425

Cash and cash equivalents at end of period

    224      224   1,679   1,547   2,679      145      145   966   1,094   668

 

BCE Supplementary Financial Information - Fourth Quarter 2020 Page 13


    Accompanying Notes

 

(1)

Our results are reported in three segments: Bell Wireless, Bell Wireline and Bell Media. Our segments reflect how we manage our business and how we classify our operations for planning and measuring performance.

Throughout this report, we, us, our, BCE and the company mean, as the context may require, either BCE Inc. or, collectively, BCE Inc., Bell Canada, their subsidiaries, joint arrangements and associates. Bell means, as the context may require, either Bell Canada or, collectively, Bell Canada, its subsidiaries, joint arrangements and associates.

 

(2)

On June 1, 2020, BCE announced that it had entered into an agreement to sell substantially all of its data centre operations in an all-cash transaction valued at $1.04 billion. We have reclassified amounts related to the sale for the previous year to discontinued operations in our consolidated income statements and consolidated statements of cash flows to make them consistent with the presentation for the current year. Property, plant and equipment and intangible assets that were sold were no longer depreciated or amortized effective June 1, 2020. The sale was completed in the fourth quarter of 2020.

 

(3)

To align with changes in how we manage our business and assess performance, the operating results of our public safety land radio network business are now included within our Bell Wireline segment effective January 1, 2020, with prior periods restated for comparative purposes. Previously, these results were included within our Bell Wireless segment. Our public safety land radio network business, which builds and manages land mobile radio networks primarily for the government sector, is now managed by our Bell Business Markets team in order to better serve our customers with end-to-end communications solutions.

 

(4)

Non-GAAP Financial Measures

In Q2 2020, we updated our definitions of adjusted net earnings, adjusted EPS and free cash flow to exclude the impacts of discontinued operations as they may affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. As a result of this change, prior periods have been restated for comparative purposes.

Adjusted EBITDA and adjusted EBITDA margin

The terms adjusted EBITDA and adjusted EBITDA margin do not have any standardized meaning under IFRS. Therefore, they are unlikely to be comparable to similar measures presented by other issuers.

We define adjusted EBITDA as operating revenues less operating costs (including post-employment benefit plans service cost) as shown in BCE’s consolidated income statements. Adjusted EBITDA for BCE’s segments is the same as segment profit as reported in BCE’s consolidated financial statements. We define adjusted EBITDA margin as adjusted EBITDA divided by operating revenues.

We use adjusted EBITDA and adjusted EBITDA margin to evaluate the performance of our businesses as they reflect their ongoing profitability. We believe that certain investors and analysts use adjusted EBITDA to measure a company’s ability to service debt and to meet other payment obligations or as a common measurement to value companies in the telecommunications industry. We believe that certain investors and analysts also use adjusted EBITDA and adjusted EBITDA margin to evaluate the performance of our businesses. Adjusted EBITDA also is one component in the determination of short-term incentive compensation for all management employees.

Adjusted EBITDA and adjusted EBITDA margin have no directly comparable IFRS financial measure. Alternatively, adjusted EBITDA may be reconciled to net earnings as shown in this document.

 

BCE Supplementary Financial Information – Fourth Quarter 2020 Page 14


    

Adjusted net earnings and adjusted EPS

The terms adjusted net earnings and adjusted EPS do not have any standardized meaning under IFRS. Therefore, they are unlikely to be comparable to similar measures presented by other issuers.

We define adjusted net earnings as net earnings attributable to common shareholders before severance, acquisition and other costs, net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net losses (gains) on investments, early debt redemption costs, impairment of assets and discontinued operations, net of tax and non-controlling interest (NCI). We define adjusted EPS as adjusted net earnings per BCE common share.

We use adjusted net earnings and adjusted EPS, and we believe that certain investors and analysts use these measures, among other ones, to assess the performance of our businesses without the effects of severance, acquisition and other costs, net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net losses (gains) on investments, early debt redemption costs, impairment of assets and discontinued operations, net of tax and NCI. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring.

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

Free cash flow

The term free cash flow does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers.

We define free cash flow as cash flows from operating activities, excluding cash from discontinued operations, acquisition and other costs paid (which include significant litigation costs) and voluntary pension funding, less capital expenditures, preferred share dividends and dividends paid by subsidiaries to NCI. We exclude cash from discontinued operations, acquisition and other costs paid and voluntary pension funding because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring.

We consider free cash flow to be an important indicator of the financial strength and performance of our businesses because it shows how much cash is available to pay dividends on common shares, repay debt and reinvest in our company.

We believe that certain investors and analysts use free cash flow to value a business and its underlying assets and to evaluate the financial strength and performance of our businesses.

The most comparable IFRS financial measure is cash flows from operating activities, as reconciled in this document.

Net debt

The term net debt does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers.

We define net debt as debt due within one year plus long-term debt and 50% of preferred shares, less cash and cash equivalents, as shown in BCE’s consolidated statements of financial position. We include 50% of outstanding preferred shares in our net debt as it is consistent with the treatment by certain credit rating agencies.

We consider net debt to be an important indicator of the company’s financial leverage because it represents the amount of debt that is not covered by available cash and cash equivalents. We believe that certain investors and analysts use net debt to determine a company’s financial leverage.

 

BCE Supplementary Financial Information – Fourth Quarter 2020 Page 15


    

Net debt has no directly comparable IFRS financial measure, but rather is calculated using several asset and liability categories from the statements of financial position, as shown in this document.

Net debt leverage ratio

The net debt leverage ratio does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We use, and believe that certain investors and analysts use, the net debt leverage ratio as a measure of financial leverage.

The net debt leverage ratio represents net debt divided by adjusted EBITDA. For the purposes of calculating our net debt leverage ratio, adjusted EBITDA is twelve-month trailing adjusted EBITDA.

Adjusted EBITDA to net interest expense ratio

The ratio of adjusted EBITDA to net interest expense does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We use, and believe that certain investors and analysts use, the adjusted EBITDA to net interest expense ratio as a measure of financial health of the company.

The adjusted EBITDA to net interest expense ratio represents adjusted EBITDA divided by net interest expense. For the purposes of calculating our adjusted EBITDA to net interest expense ratio, adjusted EBITDA is twelve-month trailing adjusted EBITDA. Net interest expense is twelve-month trailing net interest expense as shown in our statements of cash flows, plus 50% of declared preferred share dividends as shown in our income statements.

 

(5)

Key performance indicators (KPIs)

In addition to the non-GAAP financial measures described previously, we use a number of KPIs to measure the success of our strategic imperatives. These KPIs are not accounting measures and may not be comparable to similar measures presented by other issuers.

Average billing per user (ABPU) or subscriber approximates the average amount billed to customers on a monthly basis, including monthly billings related to device financing receivables owing from customers on contract, which is used to track our recurring billing streams. Wireless blended ABPU is calculated by dividing certain customer billings by the average subscriber base for the specified period and is expressed as a dollar unit per month.

Capital intensity is capital expenditures divided by operating revenues.

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

Wireless subscriber unit is comprised of an active revenue-generating unit (e.g. mobile device, tablet or wireless Internet products), with a unique identifier (typically International Mobile Equipment Identity (IMEI) number), that has access to our wireless networks. We report wireless subscriber units in two categories: postpaid and prepaid. Prepaid subscriber units are considered active for a period of 90 days following the expiry of the subscriber’s prepaid balance.

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

  

Retail Internet, IPTV and satellite TV subscribers have access to stand-alone services, and are primarily represented by a dwelling unit

  

Retail NAS subscribers are based on a line count and are represented by a unique telephone number

 

BCE Supplementary Financial Information – Fourth Quarter 2020 Page 16