Thursday, November 1, 2012

BCE - BCE reports 2012 third quarter results (CAD 0.5675)

Company: Bce Inc.
Stock Name: BCE
Amount: CAD 0.5675
Announcement Date: 01/11/2012
Record Date: 12/12/2012

Dividend Detail:





  • Bell EBITDA(1) increases 5.2%, reflecting strong contributions from Bell Wireless and
    Bell Media



  • Wireless postpaid net activations of 148,502, up 17.1%; Wireless EBITDA
    growth of 15.2% is best Q3 performance in 5 years; smartphone users now
    represent 60% of postpaid subscribers, driving 4.2% higher wireless
    ARPU and data revenue growth of 29.5%



  • Bell Fibe TV net activations of 42,973 as service footprint expands to
    more than 2.8��million households; high-speed Internet net activations
    of 13,416; 11.3% year-over-year improvement in residential local access
    line losses



  • Bell Media revenue up 25.5%, EBITDA increased 92.6%


  • Wireline EBITDA margin of 39.0% supported by $40 million year-over-year
    reduction in operating costs



  • BCE net earnings attributable to common shareholders of $569 million or
    $0.74 per share; adjusted net earnings per share(2) of $0.76 in line with plan



  • Reconfirming all 2012 BCE and Bell Canada financial guidance targets






This news release contains forward-looking statements. For a description
of the related risk factors and assumptions please see the section
entitled "Caution Concerning Forward-Looking Statements" later in this
release.



MONTREAL, Nov. 1, 2012 /CNW Telbec/ - BCE Inc. (TSX: BCE) (NYSE: BCE),
Canada's largest communications company, today reported BCE and Bell
results for the third quarter (Q3) of 2012.



BCE reported net earnings attributable to common shareholders of $569
million
, compared to $642 million in Q3 2011, and adjusted net earnings
attributable to common shareholders of $588 million, compared to $724
million
last year. In line with plan, earnings per share (EPS) of $0.74
and Adjusted EPS of $0.76 decreased in the third quarter of 2012 from
$0.83 and $0.93 per share in Q3 2011. The year-over-year decrease was
mainly due to lower income tax expense in Q3 2011 from the favourable
resolution of tax matters.



Bell total revenue increased 1.8% in the third quarter of 2012 as Bell
Wireless and Bell Media revenue growth of 7.1% and 25.5%, respectively,
was moderated by a 4.0% decrease at Bell Wireline. Bell EBITDA was up
5.2% in Q3 on growth of 15.2% at Bell Wireless and 92.6% at Bell Media,
partly offset by a 6.2% decline at Bell Wireline. Bell's operating
performance in the quarter generated $1,589 million of cash flow from
operating activities and significant free cash flow(3) of $684 million. Year to date, total cash flow from operating
activities increased to $4,689��million, or 16.3%, and total free cash
flow increased to $1,815 million, up 7.0% compared to last year.



"Bell is making unparalleled investments in the best new networks,
products and content, and we're seeing the results in strong growth
across our wireless, TV, Internet and media businesses. Bell's robust
5.2% EBITDA growth was driven in large part by outstanding performance
at Bell Wireless and Bell Media, both of which posted exceptionally
strong revenue and EBITDA growth," said George Cope, President and CEO
of BCE and Bell Canada.



"Bell is bringing new competition and choice to consumers with our
next-generation Fibe network, now serving 200,000 Fibe TV customers and
supporting both strong Bell Internet subscriber growth and our
traditional Home Phone business as more customers choose multiple Bell
services in our Fibe TV coverage area, which has expanded to over 2.8
million households. Bell's new mobile LTE network, combined with
world-leading smartphones and content services like Bell Mobile TV,
helped bring us 148,502 net new postpaid subscribers - 17.1% more than
last year - reduced churn, and great growth in Wireless data and
overall revenue."



"We're executing a strategy of investment in network leadership, product
innovation and improved customer service, and I'm proud to say the Bell
team has made us a serious contender in every market in which Bell
competes," said Mr. Cope. Bell is committed to achieving a clear goal -
to be recognized by customers as Canada's leading communications
company - through the execution of 6 Strategic Imperatives: Invest in
Broadband Networks and Services, Accelerate Wireless, Leverage Wireline
Momentum, Expand Media Leadership, Improve Customer Service, and
Achieve a Competitive Cost Structure.



"We performed well across the business in Q3, posting another sound
quarter of EBITDA growth and margin expansion, driven by exceptional
wireless and media results as well as substantial net earnings and free
cash flow consistent with our plan. Our 2012 financial plan remains on
track as we reconfirm today all our Bell and BCE guidance targets for
the year," said Siim Vanaselja, Chief Financial Officer for Bell and
BCE. "Our continued strong free cash flow generation, which year to
date has grown 7% over last year, has not only enabled significant
strategic investment in Bell's broadband wireline and wireless
platforms, but also amply supports the recent 10-cent annualized
increase in BCE's common share dividend, effective with the dividend
payment of October 15."



Bell Q3 operational performance

Bell's operating revenues were $4,392 million in Q3 2012, up 1.8% from
$4,313 million in Q3 2011. This was driven by total service revenue
growth of 2.1% as Wireless and Media revenues increased significantly
compared to last year. Total product revenues declined 1.1%, reflecting
softer wireline data equipment sales to business customers. Bell's
EBITDA grew 5.2% this quarter to $1,688 million on the strong
performance of the Bell Wireless and Bell Media segments.



Bell Wireless EBITDA in Q3 2012 grew 15.2% to $554 million and service
margin expanded to 42.4% from 39.2% last year, reflecting stronger
wireless revenue growth of 7.1% to $1,434��million as we continued to
gain high-value postpaid customers and upgrade existing customers to
smartphones, while exercising discipline in postpaid customer
acquisition and retention spending. Postpaid net activations increased
17.1% to 148,502, while the postpaid customer churn rate improved to
1.2% from 1.5% in Q3 2011, reflecting the benefits of investment in
customer service and retention. Smartphone users represented 60% of
postpaid subscribers at the end of Q3, up from 43% a year earlier,
which contributed to strong data revenue growth of 29.5% and blended
ARPU growth of 4.2%. Blended ARPU was $57.30 per month in Q3 2012, up
from $55.01 in Q3 2011, driven by a greater number of customers in
western Canada, higher roaming revenues, and more smartphone customers
taking advantage of mobile data services such as Bell Mobile TV.



Bell Wireline revenue totalled $2,505 million in the quarter, down 4.0%
from Q3 2011, as competitive and wireless substitution pressures
continued to impact traditional voice services. Reduced spending by
business customers on wireline data products and ICT solutions
reflected continuing sluggish economic growth, which also contributed
to the year-over-year decrease in overall wireline revenue this
quarter.



Continued steady growth in Fibe TV and Fibe Internet drove residential
data revenue growth of 3.5% in Q3 2012. Bell Fibe TV experienced its
best quarter ever, adding 42,973 net new subscribers, up from 20,297 in
Q3 2011. At the end of the third quarter, Bell Fibe TV had more than
200,000 subscribers with a footprint reaching over 2.8 million
households, up from approximately 1.5 million households at the end of
Q3 2011. The activation of new Fibe customers also led to 13,416 net
new high-speed Internet activations in the quarter. Although Bell
Wireline EBITDA decreased 6.2% this quarter to $978 million, margins
were maintained on plan at 39.0%, reflecting a $40 million, or 2.6%,
improvement in operating costs over last year.



Bell Media reported revenue of $546 million in Q3 2012, up 25.5% from
last year, the result of increased advertising revenues generated by
Bell Media's broadcast of the London 2012 Games and higher subscriber
fee revenue driven by market-based rates charged to broadcast
distributors through renegotiated agreements for certain Bell Media
specialty sports and non-sports TV services. Bell Media EBITDA
increased 92.6% in Q3 2012 to $156 million, reflecting the flow-through
of higher subscriber fee revenue and lower non-Olympics-related
operating expenses. Despite the positive impact on revenues from the
Olympics during Q3, advertising sales across Bell Media's properties
continued to be impacted adversely by a soft advertising market.



Bell invested $688 million in new capital this quarter, a $36 million
increase compared to Q3 2011. These investments support the continued
deployment of broadband fibre to residential homes, neighbourhoods and
businesses in Ontario and Qu��bec and expansion of the Fibe TV service
footprint, enhancement of customer service systems, the ongoing rollout
of the 4G LTE network in markets across Canada, and the addition of new
Bell and The Source stores, particularly in western Canada.



BCE results

BCE's operating revenue was $4,982 million in the third quarter of 2012,
up 1.5% from $4,910��million in the third quarter of 2011, due to 1.8%
higher revenues at Bell and slightly lower revenues at Bell Aliant.
EBITDA grew 4.0% this quarter to $2,019 million, reflecting higher
EBITDA at Bell driven by the strong contributions of Bell Wireless and
Bell Media, moderated by a year-over-year decrease at Bell Aliant.



BCE's cash flows from operating activities were $1,589 million in Q3
2012, compared to $1,916��million in the same period last year. Free
cash flow available to BCE's common shareholders was $684 million in Q3
2012 compared to $1,005 million in Q3 2011. The year-over-year
reductions were attributable primarily to the catch-up in accounts
receivable cash collection in Q3 2011 following the settlement of the
Canada Post strike.



BCE's net earnings attributable to common shareholders decreased 11.4%
in Q3 2012 to $569��million, or $0.74 per share, compared to $642
million
, or $0.83 per share, last year. The year-over-year decrease in
earnings was due to the favourable resolution of tax matters in Q3
2011, higher depreciation expense, and increased interest expense,
partly offset by higher EBITDA and lower severance, acquisition and
other costs.



BCE's Adjusted EPS was $0.76 in Q3 2012, compared to $0.93 last year.
Despite solid EBITDA growth this quarter, the decrease is attributable
to the favourable resolution of tax matters in Q3 2011 that did not
recur this year.































































































































Financial Highlights

��

��

��

��

��

��

($ millions except per share amounts) (unaudited)

��

Q3 2012

��

Q3 2011

��

% change

Bell (i)

��

��

��

��

��

��

Operating Revenues

��

4,392

��

4,313

��

1.8%

EBITDA

��

1,688

��

1,605

��

5.2%

BCE

��

��

��

��

��

��

Operating Revenues

��

4,982

��

4,910

��

1.5%

EBITDA

��

2,019

��

1,941

��

4.0%

Net Earnings Attributable to Common Shareholders

��

569

��

642

��

(11.4%)

EPS

��

0.74

��

0.83

��

(10.8%)

Adjusted EPS

��

0.76

��

0.93

��

(18.3%)

Cash flows from operating activities

��

1,589

��

1,916

��

(17.1%)

Free Cash Flow

��

684

��

1,005

��

(31.9%)

(i) ��Bell includes the Bell Wireless, Bell Wireline and Bell Media
segments.







Bell Wireless

Bell Wireless continued to accelerate its operating momentum in Q3 2012,
posting another strong quarter of EBITDA growth, margin expansion and
cash flow growth, as well as substantial postpaid subscriber
activations, increased smartphone penetration, and higher blended ARPU
driven by strong growth in mobile data usage.




  • Bell Wireless operating revenues increased 7.1% in the third quarter of
    2012 to $1,434��million. Service revenue was up 6.4% to $1,307 million
    due to the larger postpaid subscriber base and growth in wireless data
    usage. Product revenue increased 10.8% in the quarter to $113 million
    as a result of a higher percentage of smartphones in the sales mix.


  • Blended ARPU was $57.30 per month in Q3 2012, up 4.2% from $55.01 per
    month in Q3 2011, due to an increased postpaid mix, a higher proportion
    of postpaid customers using smartphones, which drove mobile data
    revenue growth of 29.5%, and a greater number of higher-ARPU postpaid
    customers from western Canada.


  • Smartphone subscribers represented 60% of the total postpaid base at the
    end of Q3, compared to 43% last year.


  • Bell Wireless EBITDA reached $554 million in the third quarter, up
    15.2%, the highest Q3 rate of growth in 5 years. The increase is mainly
    attributable to 7.1% higher wireless operating revenues and operating
    cost growth of 2.6%, reflecting disciplined spending on postpaid
    customer acquisition and retention.


  • EBITDA margin as a percentage of wireless service revenue increased 3.2
    percentage points to 42.4% in Q3 on significant service revenue
    flow-through and cost control.


  • Cost of acquisition per gross activation increased to $397, up just 1.3%
    from Q3 2011, due to increased spending on advertising and higher
    sales-related costs.


  • Postpaid gross activations increased slightly to 372,574 this quarter
    compared to 372,346 in Q3 2011. Activations in western Canada increased
    due to more points of distribution and increased advertising, even as
    some customers delayed purchases in anticipation of the Apple iPhone 5
    launch on September 21.


  • Prepaid gross activations decreased 23.0% to 118,122 due primarily to
    aggressive acquisition offers from competitors targeted at lower-ARPU
    subscribers and Bell's continued focus on acquiring postpaid customers.


  • Blended churn rate improved to 1.6% in the quarter from 2.0% in Q3 2011.
    Postpaid churn decreased to 1.2% from 1.5%, reflecting the positive
    impact of retention spending and lower customer deactivation rates on
    smartphones compared to other devices. Prepaid churn declined to 3.3%
    from 3.9% as a result of fewer customer deactivations.


  • Postpaid net activations increased 17.1% this quarter to 148,502 from
    126,854 in Q3 2011, while prepaid net customer losses decreased to
    18,738 in Q3 2012 from 41,105 last year.


  • The Bell Wireless client base reached 7,576,027 at the end of Q3 2012, a
    2.8% increase over last year.


  • Bell continues to offer customers access to Canada's largest 4G LTE
    network, now reaching more than 61% of the Canadian population in more
    than 40 markets across 7 provinces and territories. LTE complements
    Bell's 4G HSPA+ and enhanced 4G HSPA+ DC (Dual Cell) networks, offering
    coast-to-coast coverage to more than 97% and more than 83% of the
    Canadian population, respectively.


  • Bell introduced several new smartphones, including Apple's iPhone 5,
    Motorola's ATRIX HD LTE and RAZR V, and the Sierra Wireless 763 4G LTE
    Turbo Hotspot.






Bell Wireline

Bell Fibe TV activations continued to accelerate this quarter, driving
growth in Fibe Internet and Home Phone services as well as strong
residential data revenue growth. This helped moderate the ongoing
decline in traditional voice revenues and the operating performance of
Bell Business Markets, which continued to be adversely impacted by
competitive re-pricing pressures and reduced customer spending due to a
soft economy. Although wireline EBITDA decreased year over year,
margins were maintained in line with plan at 39.0%, reflecting lower
wireline operating expenses as a result of rigorous cost control and
productivity improvements.




  • Bell Wireline revenues totalled $2,505 million, down 4.0% from Q3 2011.
    The decline reflects a decrease in local and access, long distance and
    equipment and other revenues, offset by slightly higher year-over-year
    data revenues.


  • Data revenues increased 0.1% to $1,386 million due mainly to higher TV
    revenue driven by strong subscriber growth in Fibe TV.


  • Local and access revenues declined 7.9% to $654 million. Total NAS at
    the end of the quarter was 5,768,609, a 7.0% decline year over year,
    attributable to increased competition and a reduction in access lines
    and digital circuits as customers continue to adopt wireless and
    IP-based technologies.


  • Long distance revenues declined 13.9% to $192 million. The
    year-over-year decline reflected fewer minutes of use by residential
    and business customers resulting from NAS line losses and technology
    substitution, ongoing rate pressures, and decreased sales of global
    long distance minutes.


  • Equipment and other revenue decreased 8.0% to $195 million due mainly to
    lower year-over-year legacy wireline telecommunications equipment
    sales, promotional offers on TV set-top boxes, and lower consumer
    electronic equipment sales at The Source.


  • Bell Wireline EBITDA was $978 million, down 6.2% year over year on lower
    operating revenues, partly offset by a 2.6% improvement in operating
    costs. EBITDA margin was 39.0% this quarter compared to 40.0% in Q3
    2011.


  • TV net activations totalled 15,846 compared to 26,169 in Q3 2011. Bell
    Fibe TV added 42,973 net new customers compared to 20,297 in the third
    quarter of 2011. Bell Fibe TV subscribers passed 200,000 this quarter
    as the Fibe TV footprint reached over 2.8 million households at the end
    of Q3. This was moderated by lower satellite TV net activations, due to
    the rollout of IPTV by competing service providers, aggressive customer
    conversion offers from cable competitors, and Bell customer migrations
    to Fibe TV.


  • The Bell TV subscriber base totalled 2,136,765 at the end of Q3, a
    year-over-year increase of 2.9%.


  • Bell added 13,416 new net high-speed Internet customers in Q3, compared
    to a net loss of 101 last year. The improvement reflects the
    pull-through effect of service bundle offers that include Fibe TV,
    enhanced competitive offers, and continued broadband fibre network
    expansion, all of which contributed to lower customer churn year over
    year.


  • NAS net losses in the third quarter of 2012 decreased to 109,280 from
    net losses of 110,629 in the third quarter of 2011, reflecting
    residential NAS line losses of 84,540, 11.3% fewer than last year, as
    Bell continued to reduce residential NAS turnover in Fibe TV service
    areas. Business access losses increased to 24,740 from 15,362 in Q3
    2011.






Bell Media

Bell Media delivered strong financial and operational performance this
quarter, with higher subscriber fee revenues driven by market-based
rates charged to broadcast distributors for certain Bell Media
specialty sports and non-sports services, and higher revenues from
broadcasting the 2012 London Games.




  • Bell Media's operating revenue increased 25.5% this quarter to $546
    million
    from $435��million last year.


  • Not including the Olympics, advertising sales in Q3 across Bell Media's
    television, radio and digital media properties continued to be impacted
    by a soft advertising market as a result of a slow-growing economy.


  • Bell Media EBITDA increased 92.6% to $156 million, from $81 million in
    Q3 2011, due to higher operating revenues and lower overall operating
    costs.


  • The financial impact from the NHL lockout was not material this quarter.


  • CTV closed the season with more Top 20 rated programs in Canada than its
    competitors in key demos for the summer measurement period.


  • In Q3, Bell Media websites streamed more than 177 million videos,
    welcomed an average of more than 3.5 million unique visitors each
    month, and served a total of 121 billion page views.






Astral Update

Following extensive public hearings held during the week of September
10, 2012
, the CRTC on October 18 denied BCE's application to acquire
Montr��al-based Astral Media. On October 22, BCE requested that the
federal Cabinet issue a policy direction to the CRTC requiring the
commission adhere to its existing policies when considering broadcast
acquisitions. BCE announced its proposed $3.38-billion acquisition of
Astral on March 16, 2012, and the transaction was approved by over 99%
of Astral shareholders and by the Qu��bec Superior Court. Should the
CRTC's decision stand, one of the closing conditions for BCE's
acquisition of Astral will not be met and the transaction will not
proceed. The transaction also requires approval by the Competition
Bureau. On October 25, Astral announced an extension of the Outside
Date to December 16, 2012; BCE and Astral both have the right to
further postpone the Outside Date to January 15, 2013.



Maple Leaf Sports & Entertainment (MLSE) transaction completed

On August 22, 2012, the sale by Ontario Teachers' Pension Plan Board of
its ownership interest in MLSE to BCE, the BCE Master Trust Fund and
Rogers Communications was completed. The combined financial commitments
of BCE ($398 million) and the BCE Master Trust Fund ($135��million)
represent an aggregate 37.5% interest in MLSE, equal to Rogers'
interest. The acquisition secures Bell's access to TV, mobile, digital
online and radio broadcast rights to the premier professional sports
teams in Canada's largest marketplace, including the Toronto Raptors,
Maple Leafs, Marlies and Toronto FC. MLSE also has major real estate
and entertainment assets including the Air Canada Centre and the Maple
Leaf
Square condominium and commercial complex, operates sports
specialty TV channels, and is the exclusive partner of the NBA in
Canada.



Acquisition of Q9 Networks completed

On October 17, 2012, an investor group comprising BCE, Ontario Teachers'
Pension Plan Board, Providence Equity Partners LLC and Madison Dearborn
Partners LLC announced the completion of its $1.1-billion acquisition
of Canadian data centre leader Q9 Networks Inc. Concurrent with the
acquisition closing, BCE and its partners have settled the reverse
break-fee proceedings initiated in 2008 after the termination of the
proposed privatization of BCE. Under the settlement, BCE received
certain consideration, including increased equity ownership in Q9 and a
path to full ownership with an option at a favourable valuation to
acquire the partners' entire equity interest in Q9 in the future.



Bell partners with Cirque du Soleil in new Qu��bec-based content
development company


On August 28, 2012, Bell and Cirque du Soleil announced the formation of
a new joint venture to develop Qu��bec-based media content for
television, film, digital, and gaming platforms. Focused on the
development of entertainment projects for sale and licensing around the
world, the venture is another extension of Bell's strategy of
investment in the development and distribution of Qu��bec content.
Cirque du Soleil will contribute its library of existing content and
current projects to the partnership.



Bell Let's Talk mental health update

Now in its second year, the Bell Let's Talk Community Fund announced
more than $1 million in grants to 60 community-based organizations,
charities and hospitals across the country. The fund provides grants
from $5,000 to $50,000 to support local initiatives improving access to
mental health care. Bell also inaugurated the largest-ever fund raiser
for mental health in Qu��bec, the Bal des Lumi��res, to be held March 20,
2013
, at the Bell Centre in Montr��al. A partnership between Bell, CGI,
the Montr��al Canadiens and National Bank, the event will raise funds
for Qu��bec's Mental Illness Foundation, the Fondation de l'H��pital
Louis-H. Lafontaine, and the Douglas Mental Health University Institute
Foundation. On October 11, the annual Bell Event in support of the
Centre for Addiction and Mental Health (CAMH) resulted in a $1.5
million
contribution to this world-class research and treatment centre
in Toronto. Bell continues its support for the Canadian Forces as
Presenting Sponsor of the True Patriot Love Dinner in Toronto tonight.
Its third year presenting True Patriot Love, Bell's support for the
event goes directly to programs aimed at addressing the mental health
challenges faced by Canadian Forces members and their families.



Bell Aliant Regional Communications

Bell Aliant's revenues decreased 0.3% to $698 million in the third
quarter of 2012, reflecting the continued erosion of its legacy voice
business offset partly by higher revenues from growth in Internet,
data, TV, wireless, and higher equipment and other sales. Bell Aliant's
EBITDA decreased by 1.5% to $331 million, due to lower operating
revenues and slightly higher operating costs.



Common Share Dividend

BCE's Board of Directors declared a quarterly dividend of $0.5675 per
common share, payable on January 15, 2013 to shareholders of record at
the close of business on December 14, 2012.



Outlook

BCE's guidance for 2012, as provided on February 9, 2012, which was
updated on August 8, 2012 and reconfirmed on November 1, 2012, is as
follows:



























































































































��

��

��

��

��

��

��

2012 Guidance

��

February 9

Guidance

��

August 8

Guidance

��

Current Guidance

Expectation

Bell (i)

��

��

��

��

��

��

Revenue Growth

��

3% - 5%

��

Lower end

��

On track

EBITDA Growth

��

2% - 4%

��

Higher end

��

On track

Capital Intensity

��

���16%

��

~16%

��

On track

BCE

��

��

��

��

��

��

Adjusted EPS (ii)

��

$3.13 - $3.18

��

$3.15 - $3.20

��

On track

Free Cash Flow (iii)

��

$2.35B - $2.5B

��

No change

��

On track

Annual common dividend per share

��

$2.17

��

$2.27

��

On track

Dividend payout ratio (iv)

��

��

��

��

��

��

��

- Adjusted EPS

��

approx. 69%

��

No change

��

On track

��

- Free cash flow

��

approx. 69%

��

No change

��

On track






















(i)

Bell's 2012 financial guidance for revenue, EBITDA and capital intensity
is exclusive of��Bell Aliant.

(ii)

EPS before severance, acquisition and other costs and net gains/losses
on investments.

(iii)

Free cash flow before common share dividends and including dividends
from Bell��Aliant.

(iv)

Calculated using the mid-point of BCE's 2012 Adjusted EPS and free cash
flow guidance ranges.







Call with Financial Analysts

BCE will hold a conference call for financial analysts to discuss its
third quarter results on Thursday, November 1 at 8:00 am (Eastern).
Media are welcome to participate on a listen-only basis. To
participate, please dial toll-free 1-800-952-6845 or 416-695-7848. A
replay will be available for one week by dialing 1-800-408-3053 or
905-694-9451 and entering pass code 1375865#.



There will also be a live audio webcast of the call available on BCE's
website at: http://bce.ca/investors/investorevents/all/show/bce-q3-2012-results-conference-call. The mp3 file will be available for download on this page later in the
day.



Notes

The information contained in this news release is unaudited.











(1)





The term EBITDA does not have any standardized meaning under IFRS.
Therefore, it is unlikely to be comparable to similar measures
presented by other companies. We define EBITDA as operating revenues
less operating costs, as shown in BCE's consolidated income statements.



EBITDA for BCE's segments is the same as segment profit as reported in
Note 3 to BCE's Q3 2012 consolidated financial statements.



We use EBITDA to evaluate the performance of our businesses as it
reflects their ongoing profitability. We believe that certain investors
and analysts use EBITDA to measure a company's ability to service debt
and to meet other payment obligations or as a common measurement to
value companies in the telecommunications industry. EBITDA also is one
component in the determination of short-term incentive compensation for
all management employees. EBITDA has no directly comparable IFRS
financial measure. Alternatively, the following table provides a
reconciliation of net earnings to EBITDA.



































































































(In millions of Canadian dollars)

��

��

��

��

��

��

Q3 2012

��

Q3 2011

Net earnings

��

689

��

736

Severance, acquisition and other costs

��

24

��

130

Depreciation

��

674

��

628

Amortization

��

180

��

180

Finance costs

��

��

��

��

��

Interest expense

��

223

��

210

��

Interest on employee benefits obligations

��

243

��

247

Expected return on pension plan assets

��

(267)

��

(259)

Other expense (income)

��

5

��

(11)

Income taxes

��

248

��

80

EBITDA

��

2,019

��

1,941










(2)







The terms Adjusted net earnings and Adjusted EPS do not have any
standardized meaning according to IFRS. They are therefore unlikely to
be comparable to similar measures presented by other companies.



We define Adjusted net earnings as net earnings attributable to common
shareholders before severance, acquisition and other costs, and net
(gains) losses on investments. We define Adjusted EPS as Adjusted net
earnings per BCE common share.



We use Adjusted net earnings and Adjusted EPS, among other measures, to
assess the performance of our businesses without the effects of
severance, acquisition and other costs, and net (gains) losses on
investments, net of tax and non-controlling interest. We exclude these
items because they affect the comparability of our financial results
and could potentially distort the analysis of trends in business
performance. Excluding these items does not imply they are
non-recurring.



The most comparable IFRS financial measures are net earnings
attributable to common shareholders and EPS. The following table is a
reconciliation of net earnings attributable to common shareholders and
EPS to Adjusted net earnings on a consolidated basis and per BCE common
share (Adjusted EPS), respectively.




























































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

��

��

Q3 2012

��

Q3 2011

��

��

TOTAL

��

PER

SHARE

��

TOTAL

��

PER

SHARE

Net earnings attributable to common shareholders

��

569

��

0.74

��

642

��

0.83

Severance, acquisition and other costs

��

19

��

0.02

��

82

��

0.10

Adjusted net earnings

��

588

��

0.76

��

724

��

0.93










(3)









The term free cash flow does not have any standardized meaning according
to IFRS. It is therefore unlikely to be comparable to similar measures
presented by other companies.



We define free cash flow as cash flows from operating activities,
excluding acquisition costs paid, and dividends/distributions received
from Bell Aliant less capital expenditures, preferred share dividends,
dividends/distributions paid by subsidiaries to non-controlling
interest and Bell Aliant free cash flow.



We consider free cash flow to be an important indicator of the financial
strength and performance of our business because it shows how much cash
is available to repay debt and reinvest in our company. We present free
cash flow consistently from period to period, which allows us to
compare our financial performance on a consistent basis.



We believe that certain investors and analysts use free cash flow to
value a business and its underlying assets.



The most comparable IFRS financial measure is cash flows from operating
activities. The following table is a reconciliation of cash flows from
operating activities to free cash flow on a consolidated basis.












































































(In millions of Canadian dollars)

��

��

��

��

��

��

Q3 2012

��

Q3 2011

Cash flows from operating activities

��

1,589

��

1,916

Bell Aliant dividends/distributions to BCE

��

48

��

48

Capital expenditures

��

(832)

��

(814)

Cash dividends paid on preferred shares

��

(27)

��

(31)

Cash dividends/distributions paid by subsidiaries to non-controlling
interest

��

(85)

��

(75)

Acquisition costs paid

��

39

��

7

Bell Aliant free cash flow

��

(48)

��

(46)

Free cash flow

��

684

��

1,005







Caution Concerning Forward-Looking Statements

Certain statements made in this news release, including, but not limited
to, statements relating to our 2012 financial guidance (including
revenues, EBITDA, capital intensity, Adjusted EPS, free cash flow and
dividend payout ratios), our business outlook, objectives, plans and
strategic priorities, BCE's annual common dividend per share, the
completion of BCE's proposed acquisition of Astral Media Inc. (Astral),
our 4G LTE wireless and Fibe TV network and broadband fibre deployment
plans, and other statements that are not historical facts, are
forward-looking. Forward-looking statements may include words such as aim, anticipate, assumption, believe, could, expect, goal, guidance,
intend, may, objective, outlook, plan, project, seek, should, strategy,
strive, target
and will. All such forward-looking statements are made pursuant to the "safe
harbour" provisions of applicable Canadian securities laws and of the
United States Private Securities Litigation Reform Act of 1995.



Forward-looking statements, by their very nature, are subject to
inherent risks and uncertainties and are based on several assumptions,
both general and specific, which give rise to the possibility that
actual results or events could differ materially from our expectations
expressed in or implied by such forward-looking statements. As a
result, we cannot guarantee that any forward-looking statement will
materialize and you are cautioned not to place undue reliance on these
forward-looking statements. The forward-looking statements contained in
this news release describe our expectations at November 1, 2012 and,
accordingly, are subject to change after such date. Except as may be
required by Canadian securities laws, we do not undertake any
obligation to update or revise any forward-looking statements contained
in this news release, whether as a result of new information, future
events or otherwise. Except as otherwise indicated by BCE,
forward-looking statements do not reflect the potential impact of any
nonrecurring or other special items or of any dispositions,
monetizations, mergers, acquisitions, other business combinations or
other transactions that may be announced or that may occur after
November 1, 2012. The financial impact of these transactions and
non-recurring and other special items can be complex and depends on the
facts particular to each of them. We therefore cannot describe the
expected impact in a meaningful way or in the same way we present known
risks affecting our business. Forward-looking statements are presented
for the purpose of providing information about management's current
expectations and plans relating, in particular, to 2012, and allowing
investors and others to obtain a better understanding of our
anticipated operating environment. Readers are cautioned that such
information may not be appropriate for other purposes.



Material Assumptions

A number of economic, market, operational and financial assumptions were
made by BCE in preparing its forward-looking statements for 2012
contained in this news release, including, but not limited to:



Canadian Economic and Market Assumptions




  • Growth in the Canadian economy of 2.2% in 2012 based on the Bank of
    Canada's most recent estimate, a 10 basis point increase compared with
    an earlier estimate of 2.1%;


  • continued weak product sales, reflecting deferred business customer
    spending given the slow pace of economic growth;


  • a continued soft advertising market for Bell Media;


  • an ongoing intense level of wireline competition in both consumer and
    business markets;


  • higher wireline replacement, due primarily to increasing wireless and
    Internet-based technological substitution; and


  • wireless industry penetration gain of 4 to 5 basis points in 2012
    driven, in particular, by increased competition, the accelerating
    adoption of smartphones, tablets and data applications, as well as by
    the introduction of more LTE devices.






Operational Assumptions Concerning Bell Wireline (excluding Bell Aliant)




  • Stabilizing residential NAS line erosion rate as we leverage our
    broadband investment in IPTV to drive three-product household
    penetration, increase our MDU market share, and generate higher
    pull-through attach rates for our residential Internet and home phone
    services;


  • in particular, targeted retention and service bundle offers, customer
    win backs and better service execution to contribute to the improvement
    in residential NAS line losses year over year, subject to the risk of
    more aggressive service bundle offers from our cable TV competitors and
    marketing actions from the newer wireless entrants which could lead to
    higher residential NAS line losses;


  • increased subscriber acquisition at Bell TV to be driven by increased
    customer adoption of Fibe TV, and our ability to seek greater
    penetration within the MDU market, capitalize on our extensive retail
    distribution network, which includes The Source, and capitalize on our
    market leadership position in high definition (HD) programming;


  • improved subscriber acquisition at Bell Internet to be driven by
    pull-through from Fibe TV and increased adoption of Fibe Internet
    packages as we leverage our expanding broadband fibre network to offer
    higher-speed service to customers in more areas;


  • gradual business improvement in the performance of our Business Markets
    unit in 2012, based on increased business customer spending on ICT
    technology driven by an improving economy, subject to the risk of
    business customers adopting more conservative strategies which could
    result in lower capital spending requirements, deferral of ICT projects
    and increased NAS erosion;


  • cost savings and labour efficiency gains to be achieved from a reduced
    management workforce, lower corporate support group costs, renegotiated
    contracts with our vendors and outsource suppliers, client care and
    field service productivity improvements, managing content costs and
    reducing traffic that is not on our own network;


  • continued customer migration to IP-based systems and competitive
    re-price pressures in our business and wholesale markets;


  • increasing EBITDA contribution from growth services; and


  • approximately 3.3 million Bell Fibe TV-ready households by the end of
    2012.






Operational Assumptions Concerning Bell Wireless (excluding Bell Aliant)




  • Bell Wireless to benefit from the flow-through of significant
    investments made in 2011 in customer acquisition and retention, along
    with continued acceleration in smartphone activations and data usage;


  • incumbents and newer wireless entrants to continue aggressive
    competition in 2012 and newer wireless entrants to continue enhancing
    the breadth and reach of their networks, improving their distribution
    reach and expanding their device portfolios;


  • wireless revenue growth to be underpinned by ARPU driven by a higher mix
    of smartphone and higher-value postpaid customers, increased
    distribution in western Canada, new services, and continued disciplined
    price management;


  • Bell Wireless to benefit from ongoing technological improvements by
    manufacturers in our handset and device lineup and from faster data
    speeds that are allowing our clients to optimize the use of our
    services;


  • Bell Wireless to maintain a reasonable market share of the incumbent
    wireless postpaid market; and


  • higher subscriber acquisition and customer retention costs, as well as
    the continued deployment of our wireless LTE network in urban markets
    while continuing to leverage our wireless high-speed packet access plus
    (HSPA+) network.






Operational Assumptions Concerning Bell Media




  • Building and maintaining strategic supply arrangements for content on
    four screens, successfully acquiring high-rated programming and
    differentiated content to execute on Bell's multi-screen content
    strategy, producing and commissioning high-quality Canadian content,
    and producing market-leading news;


  • revenue growth in our specialty service operations to be driven by
    market-based rates charged to broadcast distributors;


  • increased costs to secure content in our sports broadcast operations as
    we face greater competition from both new and established entrants, and
    as market rates for specialty content generally increase;


  • investment in programming and marketing in combination with ongoing
    investment in high definition services;


  • maintaining our favourable market position in our radio operations by
    leveraging strategic investments made in 2011; and


  • the achievement of productivity gains and other operating efficiencies
    related to Bell Media integration synergies.






Financial Assumptions Concerning Bell (excluding Bell Aliant) and BCE




  • Bell's total employee benefit plans cost to be approximately $90
    million
    , based on an estimated accounting discount rate of 5.1% and an
    expected return on plan assets of 6.75%, comprised of an estimated
    above EBITDA employee benefit plans service cost of approximately $170
    million
    and an estimated below EBITDA net employee benefit finance
    return of approximately $100 million;


  • Bell's total pension plan cash funding to be approximately $375 million;


  • Bell's cash taxes to be approximately $300 million;


  • net interest paid to be approximately $675 million;


  • BCE's total employee benefit plans cost to be approximately $150
    million
    , including approximately $60��million for Bell Aliant, comprised
    of an estimated above EBITDA employee benefit plans service cost of
    approximately $250 million and an estimated below EBITDA net employee
    benefit finance return of approximately $100 million;


  • depreciation and amortization expense approximately $125 million higher
    compared to��2011;


  • severance, acquisition costs and other of approximately $100 million;


  • an effective tax rate of approximately 22%;


  • tax adjustments (per share) of $0.18; and


  • an annual common share dividend of $2.27 per share.






The foregoing assumptions, although considered reasonable by BCE on
November 1, 2012, may��prove to be inaccurate. Accordingly, our actual
results could differ materially from our expectations as set forth in
this news release.



Material Risks

Important risk factors that could cause our assumptions and estimates to
be inaccurate and actual results or events to differ materially from
those expressed in or implied by our forward- looking statements,
including our 2012 financial guidance, are listed below. The
realization of our forward-looking statements, including our ability to
meet our 2012 financial guidance, essentially depends on our business
performance which, in turn, is subject to many risks. Accordingly,
readers are cautioned that any of the following risks could have a
material adverse effect on our forward-looking statements. These risks
include, but are not limited to:




  • the intensity of competitive activity, including the increase in
    wireless competitive activity resulting from new wireless entrants and
    their ability to expand services, and the resulting impact on our
    ability to retain existing customers and attract new ones, as well as
    on our pricing strategies, ARPU and financial results;


  • the level of technological substitution contributing to reduced
    utilization of traditional wireline voice services and the increasing
    number of households that use only wireless telephone services;


  • the increased adoption by customers of alternative TV services;


  • variability in subscriber acquisition and retention costs based on
    subscriber acquisitions, retention volumes, smartphone sales and
    subsidy levels;


  • regulatory initiatives or proceedings, litigation, changes in laws or regulations and tax matters;


  • general economic and financial market conditions, the level of consumer
    confidence and spending, and the demand for, and prices of, our
    products and services;


  • our ability to implement our strategies and plans in order to produce
    the expected benefits, including our ability to continue to implement
    our cost reduction initiatives and contain capital intensity while
    seeking to improve customer service;


  • our ability to anticipate and respond to technological change, upgrade
    our networks and rapidly offer new products and services;


  • our failure to maintain network operating performance including as a
    result of the significant increase in broadband demand and in the
    volume of wireless data driven traffic;


  • events affecting the functionality of, and our ability to protect,
    maintain and replace, our networks, equipment, facilities, IT systems,
    software and other assets;


  • our failure to implement, on a timely basis, or maintain effective IT
    systems and the complexity and costs of our IT environment;


  • the complexity of our product offerings and pricing plans;


  • events affecting the ability of third-party suppliers to provide to us,
    and our ability to purchase, essential products and services;


  • the quality of our network and customer equipment and the extent to
    which they may be subject to manufacturing defects;


  • ineffective management of changes resulting from restructurings and
    other corporate initiatives and from the integration of business units
    and business acquisitions;


  • increased contributions to employee benefit plans;


  • labour disruptions;


  • capital and other expenditure levels, financing and debt requirements
    and our ability to raise the capital we need to implement our business
    plan, including for BCE's dividend payments and to fund capital and
    other expenditures and generally meet our financial obligations;


  • our ability to discontinue certain traditional services as necessary to
    improve capital and operating efficiencies;


  • launch and in-orbit risks of satellites used by Bell ExpressVu Limited
    Partnership;


  • the theft of our satellite television services;


  • Bell Media's significant dependence on continued demand for advertising,
    and the potential adverse effect thereon from challenging economic
    conditions, cyclical and seasonal variations and competitive pressures;


  • the adverse effect of new technology and increasing fragmentation in
    Bell Media's television and radio markets;


  • potential increases in royalties payable by Bell Media under licences
    pursuant to the Copyright Act;


  • health concerns about radio frequency emissions from wireless devices;


  • our ability to maintain customer service and our networks operational in
    the event of the occurrence of environmental disasters or epidemics,
    pandemics and other health risks;


  • employee retention and performance;


  • BCE's dependence on the ability of its subsidiaries, joint ventures and
    other companies in which it has an interest to pay dividends and make
    other distributions;


  • there can be no certainty that dividends will be declared by BCE's board
    of directors or that BCE's dividend policy will be maintained;


  • stock market volatility; and


  • the completion of our proposed acquisition of Astral is subject to closing conditions, termination rights and other risks and
    uncertainties, including, without limitation, regulatory approvals,
    including from the CRTC and Competition Bureau; consequently, there can
    be no certainty that the transaction will occur or that it will occur
    on the terms and conditions currently contemplated and, should the
    transaction proceed, that anticipated benefits will be realized.






We caution that the foregoing list of risk factors is not exhaustive and
other factors could also adversely affect our results.



We encourage investors to also read BCE's 2011 Annual MD&A dated March
8, 2012
(included in the BCE 2011 Annual Report), BCE's 2012 First
Quarter MD&A dated May 2, 2012, BCE's 2012 Second Quarter MD&A dated
August 7, 2012 and BCE's 2012 Third Quarter MD&A dated October 31,
2012
, for additional information with respect to certain of these and
other assumptions and risks, filed by BCE with the Canadian securities
commissions (available at www.sedar.com) and with the U.S. Securities and Exchange Commission (available at www.sec.gov). These documents are also available on BCE's website at www.bce.ca.



About BCE

BCE is Canada's largest communications company, providing a
comprehensive and innovative suite of broadband communication services
to residential and business customers under the Bell and Bell Aliant
brands. Bell Media is Canada's premier multimedia company with leading
assets in television, radio and digital media, including CTV, Canada's
leading television network, and the country's most-watched specialty
channels.



The Bell Mental Health Initiative is a multi-year charitable program
that promotes mental health across Canada via the Bell Let's Talk
anti-stigma campaign and support for community care, research and
workplace best practices. To learn more, please visit Bell.ca/LetsTalk. For BCE corporate information, please visit BCE.ca. For Bell product and service information, please visit Bell.ca. For Bell Media, please visit BellMedia.ca.



��



SOURCE: BELL CANADA







For further information:

Media inquiries:
Jean Charles Robillard
Bell Communications
(514) 870-4739
jean_charles.robillard@bell.ca

Investor inquiries:
Thane Fotopoulos
BCE Investor Relations
(514) 870-4619
thane.fotopoulos@bell.ca









No comments:

Post a Comment