BCE Announces First Quarter Results


	BCE Announces First Quarter Results - Confirms Dividend Q1, 2002: Revenue up 3% - EBITDA up 6% - Net earnings $301 million TORONTO, Ontario,April 24 2002 --For the first quarter of 2002, BCE Inc. (TSE:BCE, NYSE:BCE) reported total revenue of $5.2 billion, EBITDA(1) of $1.9 billion, and net earnings applicable to common shares of $301 million ($0.37 per common share). OPERATIONAL HIGHLIGHTS (Q1 2002 vs Q1 2001 unless otherwise indicated) - High-speed Internet (DSL) total subscribers grew by 86% to reach 866,000; - High-speed Internet (DSL) net additions in the quarter were 109,000; - Cellular and PCS subscribers grew 23% to reach 3.6 million; - Cellular and PCS net activations in the quarter were 94,000; - Bell ExpressVu subscribers grew 44% to reach 1,145,000; - Bell ExpressVu net additions in the quarter were 76,000; - Bell Canada's data revenue was up 14% to $923 million; and, - Bell Globemedia revenue was up 2% to $312 million. "BCE delivered solid profitability, on plan, in the quarter through the continued strong performance at Bell and careful expense management across all operations", said Jean C. Monty, Chairman and CEO of BCE. "The growth sectors we have invested in over the past several years are today delivering the results we expected and permitting Bell to again outperform many of its peers. Mobility had a strong first quarter with 94,000 net activations and a revenue increase of 21%. Bell ExpressVu had a 39% increase in revenues and now has a DTH market share of 61%. High-speed internet service (DSL) increased 14% over last quarter with 109,000 net activations and data revenue growth was 14%." "I am also pleased to report that the company is making good progress in its strategy to deliver a broader scope of services to Bell's customer base. In addition to launching numerous new products to date, from GlobeinvestorGOLD to SmartWeb to Managed Network Services, we are building convergence across the organization through operational alignment, joint programs for product development, and the pursuit of common channels", concluded Mr. Monty. "We fully support the plan at BCE Emergis to drive revenue growth from existing operations," Mr. Monty said, "and we expect that in the months to come the rebound in demand for advertising should have a positive impact on Bell Globemedia". Total revenue increased 3% over the first quarter of 2001 mainly as a result of growth from BCE's data, wireless and DTH (Direct-to-Home) satellite services. EBITDA improved by 6% compared to the same period last year, mainly due to the higher overall revenue and significant productivity improvements. Net earnings applicable to common shares were $301 million ($0.37 per common share) compared with $887 million ($1.10 per common share) for the same quarter in 2001. Net earnings in the first quarter of 2001 included gains on the sale of Nortel Networks shares of $2.9 billion partially offset by losses from discontinued operations of $2 billion (which includes the impairment on Excel), goodwill amortization of $248 million and restructuring charges at Bell Canada of $114 million. OTHER DEVELOPMENTS In a separate news release, BCE also announced today that it intends to cease further long-term support to Teleglobe Inc. BCE will conditionally provide weekly funding to Teleglobe up to a maximum aggregate amount of between US$100 million and US$125 million. Consistent with the company's previously announced program for monetization of assets, the company also indicated that it intends to complete a securitization of its directories business, which could raise proceeds of between $1.5 billion to $2.0 billion. OUTLOOK The Company provided revised financial guidance, excluding Teleglobe, for the second quarter and full year 2002, as follows: << _________________________________________________________________________ GUIDANCE EXCLUDING TELEGLOBE Q2 2002 Full Year 2002 2001 to 2004 Revised Revised Outlook CAGR Targets Outlook _________________________________________________________________________ _________________________________________________________________________ Revenue (billions) $4.8 - $5.1 $19.5 - $20.5 7% - 9% EBITDA (billions) $1.8 - $2.0 $7.5 - $8.0 9% - 11% Net earnings per share (before non-recurring items) ($) $0.45 - $0.48 $1.80 - $1.90 11% - 13% _________________________________________________________________________ >> DIVIDEND POLICY CONFIRMED In light of the Company's performance in the current year and outlook for next year, the Board of Directors reaffirmed its commitment to maintaining the current common dividend of $1.20 per share on an annualized basis. RESULTS BY BUSINESS GROUP (unaudited) BCE's operations as at March 31, 2002, included: Bell Canada, Bell Globemedia, Teleglobe and BCE Emergis. BCE Ventures consists of other BCE investments. << _________________________________________________________________________ (CDN$ in millions, except per share amounts) First Quarter For the period ended March 31 2002 2001 _________________________________________________________________________ _________________________________________________________________________ Revenue Bell Canada 4,275 4,107 Bell Globemedia 312 306 Teleglobe 505 506 BCE Emergis 132 143 BCE Ventures 271 241 Corporate and Other, including Inter-company eliminations (250) (197) _________________________________________________________________________ Total revenue 5,245 5,106 _________________________________________________________________________ _________________________________________________________________________ EBITDA Bell Canada 1,760 1,635 Bell Globemedia 33 30 Teleglobe 27 29 BCE Emergis (20) 26 BCE Ventures 88 63 Corporate and Other, including Inter-company eliminations (38) (34) _________________________________________________________________________ Total EBITDA 1,850 1,749 _________________________________________________________________________ _________________________________________________________________________ Net earnings Bell Canada 321 162 Bell Globemedia 1 (33) Teleglobe (33) (117) BCE Emergis (15) (91) BCE Ventures 12 53 Corporate and Other, including Inter-company eliminations and gains on sale of investments 28 2,923 Discontinued Operations - (1,992) Dividends on preferred shares (13) (18) _________________________________________________________________________ Net earnings applicable to common shares 301 887 _________________________________________________________________________ Net earnings per common share 0.37 1.10 _________________________________________________________________________ Impact of non-recurring items on net earnings per common share - 0.72 _________________________________________________________________________ >> FIRST QUARTER REVIEW (Q1 2002 vs Q1 2001, unless otherwise indicated) BELL CANADA The Bell Canada segment includes Bell Canada, Aliant, Bell ExpressVu and Bell Canada's interests in other Canadian telcos. - Total revenue in the first quarter was up 4% to $4.3 billion, driven mainly by growth in data, wireless and DTH revenues. - Local and access revenues were up 3% at $1.5 billion, mainly due to higher SmartTouch feature revenues and consumer terminal sales. - Long distance revenue decreased by 7% to $648 million due to competitive pricing pressures, partially offset by higher long distance conversation minutes. - Wireless revenue was up 21% to $494 million due primarily to continued strong growth in cellular and PCS subscribers. In the quarter, there were 94,000 net additions to reach 3.6 million subscribers. Including paging subscribers, BCE now serves 4.2 million wireless customers. - Data revenue increased 14% to $923 million, mainly due to higher IP/Broadband and Sympatico ISP revenues. DSL High-Speed Internet subscribers were at 866,000, which was 86% higher than in the first quarter of 2001. - Bell ExpressVu had revenue of $151 million in the quarter, a 39% increase compared with the same period last year. Net additions in the quarter were 76,000, bringing the total customer base to 1.1 million. Year-over-year, the number of ExpressVu subscribers grew by 44 %. - Bell Canada's EBITDA grew by 8% in the first quarter to reach $1.8 billion due mainly to the growth in revenues and productivity improvements. - On April 11, 2002, Bell Canada and MTS announced that they had combined the operations of Bell Intrigna and Bell Nexxia in Alberta and British Columbia to create Bell West. Operating under the Bell brand, Bell West will further capitalize on the growth opportunities Western Canada represents for telecommunication services. - On April 23, 2002, 36% of Bell Canada's interests in Telebec and Northern Telephone were monetized for net proceeds of $306 million through the Bell Nordiq Income Fund. - During the first quarter, Bell Canada introduced its Bell Managed Solutions suite of products and services while Bell Mobility officially launched its next generation (CDMA 1X) wireless voice and data networks in the Toronto, Montreal and Ottawa regions. BELL GLOBEMEDIA Bell Globemedia includes CTV, The Globe and Mail and Bell Globemedia Interactive. - Total revenue was $312 million in the quarter compared with revenue of $306 million for the same period last year. - Advertising revenue was $219 million in the quarter, essentially flat compared to the first quarter of 2001. This revenue includes the impact of the acquisitions of CFCF-TV, CKY-TV and ROB-TV in the latter part of 2001 but still represents a significant achievement when considering the relative weakness of the advertising market. - Subscriber revenues increased by 12% to reach $73 million, reflecting the addition of new digital specialty channels as well as improved print circulation revenues. - Advertising represented 70% of total revenue, subscriptions 24% and production 6%. In the first quarter of 2001, advertising represented 72% of total revenue, subscriptions 21%, and production 7%. - EBITDA was $33 million in the first quarter compared with $30 million for the same period last year, which mainly reflected implemented productivity initiatives. - On February 15, 2002, Bell Globemedia and Cogeco completed their joint acquisition of the TQS television network. TELEGLOBE - Teleglobe's revenue was $505 million in the first quarter, essentially flat when compared to the same period in 2001. - Data revenue in the first quarter of 2002 decreased by $18 million to $135 million. Additionally, Teleglobe had $22 million of capacity sales this quarter. - Voice revenue was $348 million compared with $353 million in the first quarter of 2001. Pricing pressures continued to affect Teleglobe's voice revenues; however, voice traffic carried through Teleglobe's network increased by 21% to reach 2 billion minutes for the first quarter of 2002. Most of the increased volume related mainly to increased traffic from Bell Canada. - EBITDA decreased by $2 million to $27 million. BCE EMERGIS - BCE Emergis' revenue decreased to $132 million in the quarter, compared with $143 million in revenues for the same period in 2001. The decrease was mainly related to the decline in non-recurring revenues, from $26 million in the first quarter of 2001 to $10 million in the first quarter of 2002. - EBITDA decreased by $46 million and mainly reflected the shortfall in revenues. - In the quarter, 41% of BCE Emergis' total revenue was from its U.S. operations. - On April 5, 2002, BCE Emergis detailed its revised outlook for 2002 and announced its plan to deal with its decrease in expected revenues. BCE Emergis will focus on driving recurring revenue growth, while also streamlining its service offerings and cost structure. BCE Emergis will now focus on three key growth areas: bill presentment services, payment solutions and claims processing. The plan also calls for a 20% reduction in headcount, which is already being implemented. BCE VENTURES BCE Ventures includes the activities of CGI, Telesat and other investments. - BCE Ventures' revenue was $271 million in the quarter, up 12% compared with the same period of 2001, due mainly to strong growth at CGI and higher revenues at Telesat. - EBITDA was $88 million in the quarter compared with $63 million in the first quarter of 2001, mainly as a result of higher revenues. - On April 8, 2002, BCE announced the closing of the sale of Excel for US $227.5 million. The proceeds of disposition have been paid in the form of five-year interest-bearing promissory notes. - Effective January 1, 2002, BCE classified its investment in BCI as a discontinued operation. OTHER Bell Canada's reported revenue was $3.5 billion in the first quarter compared with $3.4 billion in the same quarter of 2001. Net earnings applicable to common shares were $467 million in the quarter compared with $606 million for the same period last year. BCE is Canada's largest communications company. It has 23 million customer connections through the wireline, wireless, data/Internet and satellite services it provides, largely under the Bell brand. BCE leverages those connections with extensive content creation capabilities through Bell Globemedia which features some of the strongest brands in the industry - CTV, Canada's leading private broadcaster, The Globe and Mail, Canada's National Newspaper and Sympatico-Lycos, the leading Canadian Internet portal. As well, BCE has extensive e-commerce capabilities provided under the BCE Emergis brand. BCE shares are listed in Canada, the United States and Europe. Supplementary financial information is available in the "Investors" section of BCE's Web site at www.bce.ca . ----------------------------------------------------------------------- BCE will hold a conference/Webcast to discuss its first quarter results and to provide an operational review. A briefing will be held today at 8:00 AM for financial analysts at the Sheraton Centre, 123 Queen Street West, Toronto, Ontario, in the Civic Ballroom. THE MEDIA IS WELCOME TO ATTEND ON A LISTEN ONLY BASIS. Interested participants that are not able to attend the Analysts' Briefing in person may participate by phone by dialing (416) 405-9328. This event will also be available live on our Web site (video Webcast) at www.bce.ca . A replay facility will be available between 12:00 PM on Wednesday, April 24, 2002 and 12:00 PM on Wednesday, May 1, 2002. To access the replay facility, please dial (416) 695-5800 and enter access code 1063140. This Webcast will also be archived on our Web site. A media briefing will be held today at 10:00 AM at the Sheraton Centre, 123 Queen Street West, Toronto, Ontario in Conference Rooms D&E. Media unable to attend in person can join the briefing by dialing (416) 405-9328 or 1-800- 387-6216. This event will also be available live on our Web site (audio only) at www.bce.ca . ----------------------------------------------------------------------- CAUTION CONCERNING FORWARD-LOOKING STATEMENTS Certain statements made in this press release, including, but not limited to, the statements appearing under the "Outlook" section, and other statements that are not historical facts, are forward-looking and are subject to important risks, uncertainties and assumptions. The results or events predicted in these forward-looking statements may differ materially from actual results or events. These statements do not reflect the potential impact of any mergers, acquisitions, other business combinations, divestitures or other transactions that may be announced or completed after the date hereof. Other factors which could cause results or events to differ materially from current expectations include, among other things: the duration and extent of the current economic downturn; the possibility of further deterioration in the state of capital markets and the telecommunications industry; current negative trends in global market and economic conditions which impact the demand for, and costs of, products and services; the financial condition and credit risk of customers and uncertainties regarding collectibility of receivables; the rate of decline of prices for data and voice services; the potential significant costs and refinancing obligations that could result from SBC Communications Inc.'s decision to exercise its option to require BCE Inc. to repurchase SBC's shares in Bell Canada Holdings Inc.; the risks and costs associated with Teleglobe Inc.'s negotiation of a business combination and a comprehensive debt restructuring, including the potential risks associated with the commencement of a court-supervised restructuring; uncertainty as to whether BCE's strategies (including its convergence, billing and bundling strategies) will yield the expected benefits, synergies and growth prospects; the intensity of competitive activity, and its resulting impact on the ability to retain existing, and attract new, customers, and the consequent impact on pricing strategies, revenues and network capacity; the level of expenditures necessary to expand operations, increase the number of customers, provide new services, build and update networks and maintain or improve quality of service; the availability and cost of capital required to fund capital and other expenditures; the ability to dispose of or monetize assets; the ability to increase revenues from business segments other than voice services (such as data and Internet services); the BCE group companies' ability to develop financial, management and operating controls to manage costs and rapid change; the Internet economy growing at a slower pace than is currently anticipated; the ability to deploy new technologies and offer new products and services rapidly and achieve market acceptance thereof; stock market volatility; the availability of, and ability to retain, key personnel; the impact of adverse changes in laws or regulations or of adverse regulatory initiatives or proceedings; the impact of the CRTC's decision concerning the review of the price caps regime for local services expected in May 2002; the ability of BCE Emergis Inc. to successfully implement its plan to focus on key growth areas, drive recurring revenue growth and streamline its service offerings and operating costs; the final outcome of pending or future litigation; and Bell Canada International Inc.'s ability to meet its ongoing financial obligations as they become due. For additional information with respect to certain of these and other factors, see the Safe Harbor Notice Concerning Forward-Looking Statements dated December 12, 2001 filed by BCE under Form 6-K with the U.S. Securities and Exchange Commission and with the Canadian securities commissions. The forward-looking statements contained in this press release represent BCE's expectations as of April 24, 2002 and, accordingly, are subject to change after such date. However, BCE disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. (1) EBITDA does not have a standardized meaning prescribed by Canadian Generally Accepted Accounting Principles (GAAP) and therefore may not be comparable to similar measures presented by other publicly traded companies. BCE uses EBITDA as one of its measures to assess the operating performance of its on-going businesses. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, as well as any non-recurring items (i.e. revenues less operating expenses). << BCE Inc. - 2002 First Quarter Condensend Consolidated Financial Statements April 24, 2002 CONSOLIDATED STATEMENTS OF OPERATIONS (See Note 1) _________________________________________________________________________ For the three months ended March 31 ($ millions, except share amounts) 2002 2001 _________________________________________________________________________ (unaudited) (unaudited) Operating revenues 5,245 5,106 ______________________________ Operating expenses 3,395 3,357 Amortization expense 839 1,087 Net benefit plans credit (6) (33) Restructuring and other charges 0 239 ______________________________ Total operating expenses 4,228 4,650 ______________________________ Operating income 1,017 456 Other (expense) income (7) 3,854 ______________________________ Earnings from continuing operations before the under-noted items 1,010 4,310 ______________________________ Interest expense - long-term debt 276 276 - other debt 23 61 ______________________________ Total interest expense 299 337 ______________________________ Earnings from continuing operations before income taxes and non- controlling interest 711 3,973 Income taxes 273 995 Non-controlling interest 124 81 ______________________________ Earnings from continuing operations 314 2,897 Discontinued operations 0 (1,992) ______________________________ Net earnings 314 905 Dividends on preferred shares (13) (18) ______________________________ Net earnings applicable to common shares 301 887 _________________________________________________________________________ Net earnings per common share - basic Continuing operations 0.37 3.56 Net earnings 0.37 1.10 Net earnings per common share - diluted Continuing operations 0.37 3.52 Net earnings 0.37 1.08 Dividends per common share 0.30 0.30 Average number of common shares outstanding (millions) 808.6 808.1 _________________________________________________________________________ CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (See Note 1) _________________________________________________________________________ For the three months ended March 31 ($ millions) 2002 2001 _________________________________________________________________________ (unaudited) (unaudited) Balance at beginning of period, as previously reported 903 1,521 Adjustment for change in accounting policy (191) (182) ______________________________ Balance at beginning of period, as restated 712 1,339 Net earnings 314 905 Dividends - Preferred shares (13) (18) - Common shares (243) (242) ______________________________ (256) (260) Premium on redemption of common and preferred shares (6) (108) Other (3) (15) ______________________________ Balance at end of period 761 1,861 _________________________________________________________________________ CONSOLIDATED BALANCE SHEETS (See Note 1) _________________________________________________________________________ ($ millions) March 31 December 31 2002 2001 _________________________________________________________________________ (unaudited) (unaudited) ASSETS Current assets Cash and cash equivalents 892 569 Accounts receivable 4,160 4,118 Other current assets 1,288 1,213 ______________________________ Total current assets 6,340 5,900 Investments 1,189 1,106 Capital assets 26,080 26,599 Future income taxes 994 1,031 Other long-term assets 3,440 3,363 Goodwill and other intangible assets 16,218 16,075 ______________________________ Total assets 54,261 54,074 _________________________________________________________________________ LIABILITIES Current liabilities Accounts payable and accrued liabilities 5,186 5,792 Income and other taxes payable 276 681 Debt due within one year 5,768 5,263 ______________________________ Total current liabilities 11,230 11,736 Long-term debt 14,977 14,861 Future income taxes 945 924 Other long-term liabilities 4,311 4,129 ______________________________ Total liabilities 31,463 31,650 ______________________________ Non-controlling interest 5,753 5,625 ______________________________ SHAREHOLDERS' EQUITY Preferred shares 1,510 1,300 ______________________________ Common shareholders' equity Common shares 13,829 13,827 Contributed surplus 980 980 Retained earnings 761 712 Currency translation adjustment (35) (20) ______________________________ Total common shareholders' equity 15,535 15,499 ______________________________ Total shareholders' equity 17,045 16,799 ______________________________ Total liabilities and shareholders' equity 54,261 54,074 _________________________________________________________________________ CONSOLIDATED STATEMENTS OF CASH FLOWS (See Note 1) _________________________________________________________________________ For the three months ended March 31 ($ millions) 2002 2001 _________________________________________________________________________ (unaudited) (unaudited) Cash flows from operating activities Earnings from continuing operations 314 2,897 Adjustments to reconcile earnings from continuing operations to cash flows from operating activities: Amortization expense 839 1,087 Restructuring and other charges 0 231 Gains and losses on reduction of ownership in subsidiaries and joint ventures and on disposal of investments 0 (3,867) Future income taxes (26) 375 Other items 119 (91) Changes in non-cash working capital components (999) (181) ______________________________ 247 451 ______________________________ Cash flows from investing activities Capital expenditures (939) (1,947) Investments (106) (75) Divestitures 203 4,537 Other items (25) 169 ______________________________ (867) 2,684 ______________________________ Cash flows from financing activities Increase (decrease) in notes payable and bank advances 136 (1,504) Issue of long-term debt 1,253 908 Repayment of long-term debt (103) (297) Issue of common shares 2 47 Purchase of common shares for cancellation 0 (191) Issue of preferred shares 510 0 Redemption of preferred shares (306) 0 Dividends paid on common and preferred shares (250) (260) Issue of common shares, preferred shares, convertible debentures and equity-settled notes by subsidiaries to non-controlling interest 7 683 Redemption of preferred shares by subsidiaries 0 (136) Dividends paid by subsidiaries to non-controlling interest (71) (81) Other items (8) 2 ______________________________ 1,170 (829) ______________________________ Effect of exchange rate changes on cash and cash equivalents 0 4 ______________________________ Cash provided by continuing operations 550 2,310 Cash (used in) provided by discontinued operations (227) 328 ______________________________ Net increase in cash and cash equivalents 323 2,638 Cash and cash equivalents at beginning of period 569 260 ______________________________ Cash and cash equivalents at end of period 892 2,898 _________________________________________________________________________ Note 1. These unaudited consolidated interim financial statements of BCE Inc. for the first quarter of 2002 are included for the reader's information only. They are not complete as they exclude the accompanying notes, which are an integral part of the financial statements. More specifically, they exclude disclosure of certain significant developments that BCE Inc. announced on April 24, 2002 relating to Teleglobe Inc. Final unaudited consolidated interim financial statements for the first quarter of 2002, including the accompanying notes, will be filed shortly with the relevant securities regulatory authorities following their approval by BCE Inc.'s Board of Directors. >> -30- For further information: Nick Kaminaris, Communications, On April 24: 1-888-482-0809, After April 24: (514) 786-3908; Isabelle Morin, Investor Relations, (514) 786-3845

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