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Bell Canada Enterprises Reports First Quarter Results
(All figures are in Cdn$, unless otherwise indicated)
- Wireless net activations: 92,000
- DSL net activations: 115,000
- Video net activations : 16,000
- Net debt down by $430 million
MONTREAL,May 5 2004 --
For the first quarter of 2004, BCE Inc.
(TSX, NYSE: BCE) reported revenue of $4.70 billion, up 0.4% and EBITDA(1) of
$1.85 billion, up 4.1% when compared to the same period last year. Operating
income increased by 3.8% to reach $1.0 billion and earnings per share were
$0.51, an increase of $0.01. Not including the foreign exchange gain recorded
in the first quarter, 2003, EPS increased by $0.04 or 8.5%. During the first
quarter, BCE generated free cash flow(2) of $234 million, up 11%.
"We are pleased with the solid progress the company has made in the first
quarter," said Michael Sabia, President and CEO of Bell Canada Enterprises.
"We had an outstanding performance in our Wireless business with strong
revenue and subscriber growth in both our Business and Consumer groups. Our
DSL and video gains were also solid and we're beginning to see positive signs
of improvement from the initiatives we have taken to bolster the performance
of our Small and Medium Business (SMB) and Enterprise groups."
Wireless
Our Wireless business reported 92,000 new customers, a 31% increase in
the net activations compared to the same period last year. It successfully
lowered its post-paid churn to 1.1%, an improvement of 0.2 percentage points,
through customer care initiatives and sustained marketing efforts. As a
result, the total wireless subscriber base increased 13.5% compared to the
first quarter, 2003, driving an increase of 18% in wireless revenues.
Increases in usage, wireless long distance and data services also contributed
to the revenue growth.
DSL
Bell increased its Sympatico DSL High-Speed Internet subscriber base by
32% compared to the first quarter, 2003 to reach 1.6 million subscribers. This
drove higher Internet revenues of 18%. Net DSL additions of 115,000 in this
quarter represent the strongest quarterly increase since 2001. The
subscriptions to value-added services, such as Desktop Anti-Virus and Desktop
Firewall, were up by more than 200%.
A Focus on Profitability
With a sustained focus on productivity measures, which included more
profitable contracts in our Enterprise and Wholesale groups, EBITDA grew by
4.1%. EBITDA margin improved 1.4 percentage points over the same period last
year to 39.3 %. This on-going financial discipline across our businesses
yielded an 11% free cash flow increase and a $430 million net debt reduction.
"These are critically important accomplishments as we continue our drive
for profitable growth," Mr. Sabia said. "A continued steady focus on the
fundamentals - innovation, simplicity, efficiency and financial discipline -
is our key to success in an IP world."
Continued Strong Performance in Consumer Segment
Bell's consumer segment revenues increased to $1.8 billion, a jump of
5.6% over the same period last year, due to growth in Wireless, DSL and Video.
Video subscribers increased by 16,000 and revenues were up 17%. Bell doubled
the speed of its high-speed service for 75% of its customers to three megabits
per second - at no cost to them. And the company extended the availability of
its high-speed service to 80% of customers in Quebec and Ontario and to 66% of
Atlantic Canadians.
Bell will soon launch a new generation Sympatico portal with Microsoft.
The new portal will focus on simplicity and add value for customers by
offering enhanced home page customization, advanced messaging, superior
security and exclusive portal content. The portal, combined with Bell's new
Wireless Home Networking service, will give Bell customers access to unique
content anywhere, anytime.
"High speed Internet is our conduit into the broadband home and the
pipeline our customers will use to access the world of Internet Protocol
services," said Mr. Sabia. "For those two reasons it's critical for Bell to
lead in this area. We are using our Sympatico portal to draw in even more high-
speed subscribers by turning it into a one-stop shop for all their on-line
needs."
Customers enjoying the benefits of the Bundle from Bell reached 130,000.
Over 40% of the nearly 70,000 new customers in the first quarter have signed
up for at least one new service.
Improved Results in Business Segment
Business segment revenues grew 1.1% to reach $1.4 billion. This was
largely due to higher wireless revenues, IP services revenues, terminal
equipment sales and teleconferencing growth. Partially offsetting these
increases were lower data and long distance revenues. Data revenues were also
affected by the anticipated decrease in revenues from Bell West's SuperNet
contract in Alberta, which is in its last year. Overall, however, there was
strengthening in the Business segment results compared to previous quarters.
Changes in Bell's SMB group are simplifying operations and shortening
turnaround times. For example, we have shortened provisioning times for
business high-speed Internet service and the installation of Private Branch
Exchange (PBX) telephone systems. This means the customer is up and running
far sooner than before. For us, it means an earlier start to the revenue flow.
Bell's large Enterprise customer group is leading the charge in the
company's transformation to an IP-based communications company. IP based
revenues grew by 35% in the quarter and 30% of data revenues are now on the IP
platform.
"The early adoption of our IP solutions by our major business customers
is central to the successful migration of all our customers onto our IP
platform," said Mr. Sabia. "IP migration plans for most of the customers in
the Enterprise group are being developed to ensure this momentum continues."
HIGHLIGHTS
(Q1 2004 vs. Q1 2003, unless otherwise indicated)
Revenues by segment(3)
Effective January 1, 2004, BCE began to report its results under five
segments: Consumer, Business, Aliant, Other Bell Canada, which consists of all
of Bell Canada's other businesses, and Other BCE, which consists of BCE's
other businesses, which include Bell Globemedia, BCE Emergis, Telesat and CGI.
These segments reflect the operational structure of BCE, which was realigned
on June 1, 2003 to focus on the various markets in which the company operates.
<<
_________________________________________________________________________
(Cdn$ millions)
__________________________
First quarter
For the period ended March 31 2004 2003
_________________________________________________________________________
_________________________________________________________________________
Revenue
Consumer(4) 1,825 1,729
Business(5) 1,435 1,419
Aliant(6) 504 501
Other Bell Canada(7) 474 552
Inter-segment eliminations (132) (118)
_________________________________________________________________________
Total Bell Canada revenue 4,106 4,083
_________________________________________________________________________
Other BCE(8) 727 722
Inter-segment eliminations (136) (129)
_________________________________________________________________________
Total BCE revenue 4,697 4,676
_________________________________________________________________________
_________________________________________________________________________
>>
Consumer
- The key growth areas (Wireless, DSL High-Speed Internet and Video
services) drove the 5.6% increase in Consumer revenues.
- Increased subscribers contributed to the growth in consumer wireless
and video revenues.
- Data revenue growth was driven by an increase in the consumer High
Speed Internet customer base.
- Subscriptions to Sympatico's value-added services, such as Desktop Anti-
Virus and Desktop Firewall, increased by 60,000 to reach 347,000 by the
end of the quarter.
- Long distance revenues declined mainly as a result of lower volume in
conversation minutes.
Business
- Business revenues increased by 1.1%. Higher wireless, IP based
revenues, equipment sales and teleconferencing revenues more than
offset lower data and long distance revenues.
- Business wireless revenues were driven by subscriber growth.
- Data revenues declined due to the market weakness in this sector and
the anticipated lower revenues from the SuperNet project in Alberta,
which is in its last year.
- Long distance revenues declined reflecting continued pressure on
pricing and a slight decline in the volume of conversation minutes.
Aliant
- Aliant segment revenues increased $3 million or 0.6%.
- Aliant's wireless revenues grew 18%, driven by a 10% increase in
wireless customers and higher ARPU.
- Aliant's data revenues were up due mainly to increased high-speed
Internet subscribers.
- Long distance revenues declined due to competitive pressures.
Other Bell Canada
- Other Bell Canada revenues decreased by $78 million or 14%, as a result
of lower long distance and data revenues in Bell's Wholesale business.
- Wholesale long distance revenues were affected by competitive pricing
pressures and the exit in 2003 from certain low margin contracts and
promotional offers for international switched minutes.
- The Wholesale data revenue decrease reflected the continued softness in
underlying demand from wholesale customers and competitive pricing
pressures.
Other BCE
- Revenues from BCE's other businesses increased by 0.7%, mainly as a
result of Bell Globemedia and Telesat.
- Bell Globemedia's revenues were up 2.1% mainly as a result of a 10%
increase in television advertising revenues and a 4% increase in print
advertising revenues.
- Telesat's revenues increased by 6.3% as a result of higher satellite
services and international consulting revenues.
- BCE Emergis revenues decreased 11% due to lowser inter-company revenue
with Bell Canada and from planned reductions in non-core revenues.
Revenues and key metrics by product line Bell Canada's consolidated
revenues and key metrics by product line is provided below for further insight
into management's view of the financial results of the company.
<<
_________________________________________________________________________
(Cdn$ millions)
________________________________
First quarter
For the period ended March 31 2004 2003
_________________________________________________________________________
_________________________________________________________________________
Revenue
Local and access 1,379 1,386
Long distance 606 686
Wireless 651 551
Data 892 920
Video 207 177
Terminal sales & other 371 363
_________________________________________________________________________
Total Bell Canada revenue 4,106 4,083
_________________________________________________________________________
>>
Wireline (local and access and long-distance)
- Residential and business local access lines declined by 1.0% and
primarily reflected losses to competition. Local and access revenues
were 0.5% lower compared to the first quarter of 2003.
- Long distance revenues decreased by 12% due to continued competitive
pressures.
Wireless
- Wireless revenues were up 18% due to strong growth in subscribers and
increases in usage and long distance and data services.
- The cellular and PCS subscriber base increased by 13.5% or 536,000
compared to the first quarter of 2003 to reach 4,504,000 at March 31.
- Cellular and PCS net additions totaled 92,000 in the first quarter.
- The more profitable wireless postpaid net additions were at 69,000 or
75% of the total net activations. Postpaid customers totaled 3,422,000
as at March 31.
- Total postpaid wireless churn was at 1.1%, down from 1.3% last year,
and continued to reflect our priority on customer service. Blended
churn was industry-leading at 1.3%, down from 1.4% last year.
- Virgin Mobile and Bell Mobility have teamed up to offer next generation
wireless services to younger Canadian consumers. This new service will
be rolled-out later this year.
Data
- Data revenues decreased by 3.0%. Competitive pricing and volume
pressures were partially offset by the 18% increase in revenues from
Sympatico High-Speed Internet.
- Data revenues were also negatively impacted by the anticipated
decreased revenues from Bell West's build-out of the SuperNet in
Alberta, which is in its last year.
- High-Speed Internet (DSL) subscribers increased by 115,000 in the
quarter to reach 1,597,000 by March 31, an increase of 32% compared to
last year.
- High-Speed and dial-up Internet subscribers reached 2,433,000 as at
March 31.
Video Services
- A 6.5% increase in the subscriber base compared to the first quarter of
2003 and higher pricing contributed to a 17% improvement in revenues.
- Net additions were 16,000 in the quarter. Total subscribers reached
1,403,000 as at March 31.
EBITDA
- Total BCE EBITDA increased by 4.1% to $1.85 billion largely as a result
of the improved profitability in the Consumer, Business and Aliant
segments and because of cost control initiatives throughout the
company.
- As a percentage of revenues (EBITDA margin), BCE's EBITDA was at 39.3%
compared to 37.9% for the same period last year, a 1.4% percentage
points increase.
- Bell's EBITDA margin was at 42.7% in the first quarter of 2003 compared
to 41.5% for the same period last year. There was notable margin
improvement in the Consumer and Business segments, through the
continued focus on productivity and a greater emphasis on more
profitable contracts within the wholesale market.
<<
Operating income and EPS
_________________________________________________________________________
(Cdn$ millions, except per share amounts)
_____________________________________________
First quarter
For the period ended March 31 2004 2003
_________________________________________________________________________
Operating Income
Consumer 526 493
Business 241 190
Aliant 82 81
Other Bell Canada 111 162
_________________________________________________________________________
Total Bell Canada Operating Income 960 926
Other BCE 46 43
_________________________________________________________________________
Total BCE Operating Income 1,006 969
_________________________________________________________________________
Other Income 34 51
Interest Expense (248) (278)
Income Taxes (269) (240)
Non-controlling interest (44) (38)
Discontinued operations 9 9
Dividends on preferred shares (18) (15)
Premium on redemption of preferred shares - (7)
_________________________________________________________________________
Net earnings applicable to common shares 470 451
_________________________________________________________________________
Net earnings per common share 0.51 0.50
_________________________________________________________________________
>>
- Operating income increased by 3.8% mainly as a result of the increase
in revenues and productivity gains. Operating income was negatively
affected by higher amortization expenses and net benefit plans cost.
- Operating income for the Consumer segment grew 6.7%. The increase in
revenues combined with lower settlement expenses and increased
productivity more than offset a higher amortization expense and net
benefit plans cost.
- Operating Income for the Business segment increased by 27% due to the
increase in revenues combined with lower operating expenses from
increased productivity and the exit from non-profitable contracts
within the Enterprise market. There was a higher net benefits plans
cost.
- Operating Income at Aliant remained relatively flat.
- Operating Income for the Other Bell Canada segment decreased by 31.5%
as a result of lower demand and re-pricing impacts in the more
competitive wholesale environment.
- Earnings per share increased by $0.01. Increased operating income and
lower interest expense due to lower average debt levels compared to
2003 were partly offset by higher foreign exchange gains realized in
2003. Not including these gains, EPS increased by $0.04.
Capital Efficiency/Cash Flow
- BCE's first quarter 2004 capital expenditures as a percentage of
revenues (CAPEX intensity) were 14.6%, compared to the 12.7% reported
last year.
- Bell's CAPEX intensity for the first quarter was 14.4%, compared to
13.1% in the first quarter of 2003. The higher spending mainly related
to Bell's DSL footprint expansion and infrastructure that improved
productivity.
- For the first quarter, cash from operating activities of $1.2 billion
increased by $86 million compared to last year.
- Free cash flow (after dividend payments, capital expenditures and other
investing activities) of $234 million for the first quarter of 2004
improved by 11% from the $211 million reported for the same period last
year. This resulted from increased cash from operations and insurance
proceeds received by Telesat.
- Overall net debt levels were reduced by $430 million since the
beginning of the year. BCE's net debt to capitalization ratio improved
to 42.7% at March 31, 2004 from 43.8% at December 31, 2003. This
reflected management's success in driving free cash flow generation and
the receipt of $285 million for the sale of BCE Emergis' U.S. Health
business.
OUTLOOK
BCE confirmed its annual full year 2004 financial guidance of:
- revenue growth comparable to 2003 growth
- mid-to-high single-digit growth in earnings per share (before net
investment gains/losses, impairment or restructuring charges)
- free cash flow(2) of approximately $1 billion, mainly from recurring
sources, and
- Bell Canada capital intensity of 17% to 18%.
BELL CANADA STATUTORY RESULTS
Bell Canada "statutory" includes Bell Canada, and Bell Canada's interests
in Aliant, Bell ExpressVu (at 52%), and other Canadian telcos.
Bell Canada's reported statutory revenue was $4.1 billion in the first
quarter of 2004, up 0.6% compared to the same period last year. Net earnings
applicable to common shares were $548 million in the first quarter of 2004,
compared to $495 million for the same period last year.
ABOUT BCE
Bell Canada Enterprises is Canada's largest communications company.
Through its 26 million customer connections, BCE provides the most
comprehensive and innovative suite of communication services to residential
and business customers in Canada. Under the Bell brand, the company's services
include local, long distance and wireless phone services, high speed and
wireless Internet access, IP-broadband services, value-added business
solutions and direct-to-home satellite and VDSL television services. Other BCE
businesses include Canada's premier media company, Bell Globemedia, BCE
Emergis, a leading North American eBusiness company, and Telesat, a pioneer
and world leader in satellite operations and systems management. BCE shares
are listed in Canada, the United States and Europe.
BCE 2004 First Quarter Financial Information:
---------------------------------------------
BCE's 2004 First Quarter Shareholder Report (which contains BCE's 2004
first quarter MD&A and unaudited consolidated financial statements) and other
relevant financial materials are available at www.bce.ca/en/investors, under
"Investor Briefcase". BCE's 2004 First Quarter Shareholder Report is also
available on the Web site maintained by the Canadian securities regulators at
www.sedar.com. It is also available upon request from BCE's
Investor Relations
Department (e-mail: investor.relations@bce.ca, tel.:
1 800 339-6353; fax:
(514) 786 3970).
BCE's 2004 First Quarter Shareholder Report will be sent to BCE's
shareholders who have requested to receive it on or about May 11, 2004.
Call with Financial Analysts:
-----------------------------
BCE will hold a teleconference/Webcast (audio only) for financial
analysts to discuss its first quarter results on Wednesday, May 5, 2004 at
8:00 AM (Eastern). The media is welcome to participate on a listen only basis.
Michael Sabia, President and Chief Executive Officer, and Siim Vanaselja,
Chief Financial Officer, will be present for the teleconference.
Interested participants are asked to dial (416) 406-6419 between 7:50 AM
and 7:58 AM. If you are disconnected from the call, simply redial the number.
If you need assistance during the teleconference, you can reach the operator
by pressing "0". This teleconference will also be Webcast live (audio only) on
our Web site at www.bce.ca .
Call with the Media:
--------------------
BCE will hold a teleconference / Webcast (audio only) for media to
discuss its first quarter results on Wednesday, May 5, 2004 at 1:00 PM
(Eastern). Michael Sabia will be present for this teleconference.
Interested participants are asked to dial 1 800 387-6216 between 12:50 PM
and 12:58 PM. If you are disconnected from the call, simply redial the number.
If you need assistance during the teleconference, you can reach the operator
by pressing "0". This teleconference will also be Webcast live (audio only) on
our Web site 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 non-recurring items or of any dispositions,
monetizations, mergers, acquisitions, other business combinations or
other transactions that may be announced or that may occur after the date
hereof.
Other factors that could cause results or events to differ materially
from current expectations include, among other things: the ability of our
strategies and plans to produce the expected benefits and growth
prospects, including targets for revenue, earnings per share, free cash
flow and capital intensity; the impact on our financial results of the
migration of our multiple service-specific networks to a single IP-based
network; the ability to increase the number of customers who buy multiple
products; the ability to implement the significant changes in processes,
in how we approach our markets, and in products and services, required by
our strategic direction; general economic and market conditions and the
level of consumer confidence and spending, and the demand for, and prices
of, our products and services; the intensity of competitive activity from
both traditional and new competitors, Canadian or foreign, including
cross-platform competition, which is anticipated to increase following
the introduction of new technologies such as Voice over Internet Protocol
(VoIP), and its resulting impact on the ability to retain existing, and
attract, new customers, and on pricing strategies and financial results;
the ability to improve productivity and contain capital intensity while
maintaining quality of services; the ability to anticipate, and respond
to, changes in technology, industry standards and client needs and
migrate to and deploy new technologies, including VoIP, and offer new
products and services rapidly and achieve market acceptance thereof; the
availability and cost of capital required to implement our financing
plans and fund capital and other expenditures; the ability to retain
major customers; the ability to find suitable companies to acquire or to
partner with; the impact of pending or future litigation and of adverse
changes in laws or regulations, including tax laws, or of adverse
regulatory initiatives or proceedings, including decisions by the CRTC
affecting our ability to compete effectively; the risk of low returns on
pension plan assets; the availability of, and ability to retain, key
personnel; the ability to manage effectively labor relations and
negotiate satisfactory labor agreements while avoiding work stoppage;
events affecting the functionality of our networks or of the networks of
other telecommunications carriers on which we rely to provide our
services; and stock market volatility.
For additional information with respect to certain of these and other
factors, refer to BCE Inc.'s 2004 First Quarter Shareholder Report dated
May 4, 2004 filed by BCE Inc. with the U.S. Securities and Exchange
Commission, under Form 6-K, and with the Canadian securities commissions.
The forward-looking statements contained in this press release represent
our expectations as of May 5, 2004 and, accordingly, are subject to
change after such date. However, we disclaim any intention and assume no
obligation to update any forward-looking statements, whether as a result
of new information or otherwise.
--------------------------------------------
(1) The term, EBITDA (earnings before interest, taxes, depreciation and
amortization), does not have any standardized meaning prescribed by
Canadian generally accepted accounting principles (GAAP). It is
therefore unlikely to be comparable to similar measures presented by
other companies. EBITDA is presented on a consistent basis from
period to period. We use EBITDA, among other measures, to assess the
operating performance of our ongoing businesses without the effects
of amortization expense, net benefit plans cost, and restructuring
and other charges. We exclude amortization expense and net benefit
plans cost because they largely depend on the accounting methods and
assumptions a company uses, as well as non-operating factors, such as
the historical cost of capital assets and the fund performance of a
company's pension plans. We exclude restructuring and other charges
because they are transitional in nature. EBITDA allows us to compare
our operating performance on a consistent basis. We believe that
certain investors and analysts use EBITDA to measure a company's
ability to service debt and to meet other payment obligations, or as
a common valuation measurement in the telecommunications industry.
EBITDA should not be confused with net cash flows from operating
activities. The most comparable Canadian GAAP financial measure is
operating income. The table below is a reconciliation of EBITDA to
operating income on a consolidated basis:
<<
_________________________________________________________________________
Q1 2004 Q1 2003
_________________________________________________________________________
EBITDA 1,845 1,773
Amortization expense (775) (762)
Net benefit plans cost (63) (42)
Restructuring and other charges (1) 0
_________________________________________________________________________
Operating income 1,006 969
_________________________________________________________________________
(2) We define free cash flow as cash from operating activities after
capital expenditures, total dividends and other investing activities.
The term, free cash flow, does not have any standardized meaning
prescribed by Canadian GAAP. It is therefore unlikely to be
comparable to similar measures presented by other companies. Free
cash flow is presented on a consistent basis from period to period.
We consider free cash flow to be an important indicator of the
financial strength and performance of our business because it shows
how much cash is available to repay debt and to reinvest in our
company. We believe that certain investors and analysts use free cash
flow when valuing a business and its underlying assets. The most
comparable Canadian GAAP financial measure is cash from operating
activities. The following is a reconciliation of free cash flow to
cash from operating activities on a consolidated basis:
_________________________________________________________________________
(in $ millions) Q1 2004 Q1 2003
_________________________________________________________________________
Cash from operating activities 1,243 1,157
Capital expenditures (688) (594)
Other investing activities 20 (40)
Preferred dividends (22) (11)
Dividends paid by subsidiaries to
non-controlling interest (42) (44)
_________________________________________________________________________
Free cash flow from operations, before
common dividends 511 468
Common dividends (277) (257)
_________________________________________________________________________
Free cash flow from operations, after
common dividends 234 211
_________________________________________________________________________
>>
For 2004, we expect to generate approximately $1 billion in free cash
flow. This amount reflects expected cash from operating activities of
approximately $5.5 billion less capital expenditures, total dividends and
other investing activities.
(3) BCE's reporting structure is organized by the major customer segments
it serves, and reflects how it classifies its operations for planning
and measuring performance.
(4) The Consumer segment provides local telephone, long distance,
wireless, Internet access, video and other services to Bell Canada's
residential customers mainly in Ontario and Québec. It includes Bell
Canada's consumer wireline, wireless and Internet access business and
Bell ExpressVu's video services.
(5) The Business segment provides local telephone, long distance,
wireless, data and other services to Bell Canada's small and medium-
sized businesses (SMB) and large enterprise customers in Ontario and
Québec as well as SMB and large enterprise customers in Western
Canada through Bell West.
(6) The Aliant segment provides local telephone, long distance, wireless,
data, including Internet services and other services to residential
and business customers in Atlantic Canada.
(7) The Other Bell Canada segment includes Bell Canada's wholesale
business, and the financial results of Télébec, Northern Telephone
and Northwestel. Telebec, Northern Telephone and Northwestel provide
telecommunications services to less-populated areas in Ontario,
Québec and Canada's northern territories.
(8) The Other BCE segment includes the financial results of our media,
satellite, information technology and e-business activities as well
as the costs incurred by our corporate office. This segment includes
Bell Globemedia, Telesat, CGI, BCE Emergis and our corporate office.
<<
CONSOLIDATED STATEMENTS OF OPERATIONS
_________________________________________________________________________
For the three months ended March 31
(in $ millions, except share amounts) (unaudited) 2004 2003
_________________________________________________________________________
Operating revenues 4,697 4,676
________________________
Operating expenses (2,852) (2,903)
Amortization expense (775) (762)
Net benefit plans cost (Note 4) (63) (42)
Restructuring and other charges (1) -
________________________
Total operating expenses (3,691) (3,707)
________________________
Operating income 1,006 969
Other income 34 51
Interest expense (248) (278)
________________________
Earnings from continuing operations before
income taxes and non-controlling interest 792 742
Income taxes (269) (240)
Non-controlling interest (44) (38)
________________________
Earnings from continuing operations 479 464
Discontinued operations 9 9
________________________
Net earnings 488 473
Dividends on preferred shares (18) (15)
Premium on redemption of preferred shares - (7)
_________________________________________________________________________
Net earnings applicable to common shares 470 451
_________________________________________________________________________
_________________________________________________________________________
Net earnings per common share - basic
Continuing operations 0.50 0.48
Discontinued operations 0.01 0.02
Net earnings 0.51 0.50
Net earnings per common share - diluted
Continuing operations 0.50 0.48
Discontinued operations 0.01 0.02
Net earnings 0.51 0.50
Dividends per common share 0.30 0.30
Average number of common shares
outstanding - basic (millions) 924.1 917.1
_________________________________________________________________________
CONSOLIDATED STATEMENTS OF DEFICIT
_________________________________________________________________________
For the three months ended March 31
(in $ millions) (unaudited) 2004 2003
_________________________________________________________________________
Balance at beginning of period, as
previously reported (5,830) (6,435)
Accounting policy change for asset
retirement obligations (Note 1) (7) (7)
________________________
Balance at beginning of period, as restated (5,837) (6,442)
Net earnings 488 473
Dividends - Preferred shares (18) (15)
- Common shares (277) (275)
________________________
(295) (290)
Premium on redemption of preferred shares - (7)
Other (1) 1
_________________________________________________________________________
Balance at end of period (5,645) (6,265)
_________________________________________________________________________
_________________________________________________________________________
CONSOLIDATED BALANCE SHEETS
_________________________________________________________________________
March 31 December 31
(in $ millions) (unaudited) 2004 2003
_________________________________________________________________________
ASSETS
Current assets
Cash and cash equivalents 1,511 714
Accounts receivable 2,283 2,077
Other current assets 882 745
Current assets of discontinued operations - 45
________________________
Total current assets 4,676 3,581
Capital assets 20,932 21,195
Other long-term assets 3,559 3,550
Indefinite-life intangible assets 2,910 2,910
Goodwill 7,875 7,825
Non-current assets of discontinued operations 55 276
_________________________________________________________________________
Total assets 40,007 39,337
_________________________________________________________________________
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 3,759 3,691
Debt due within one year 1,171 1,537
Current liabilities of discontinued operations - 27
________________________
Total current liabilities 4,930 5,255
Long-term debt 13,126 12,393
Other long-term liabilities 4,774 4,713
________________________
Total liabilities 22,830 22,361
________________________
Non-controlling interest 3,385 3,403
________________________
SHAREHOLDERS' EQUITY
Preferred shares 1,670 1,670
________________________
Common shareholders' equity
Common shares 16,753 16,749
Contributed surplus 1,045 1,037
Deficit (5,645) (5,837)
Currency translation adjustment (31) (46)
________________________
Total common shareholders' equity 12,122 11,903
________________________
Total shareholders' equity 13,792 13,573
_________________________________________________________________________
Total liabilities and shareholders' equity 40,007 39,337
_________________________________________________________________________
CONSOLIDATED STATEMENTS OF CASH FLOWS
_________________________________________________________________________
For the three months ended March 31
(in $ millions) (unaudited) 2004 2003
_________________________________________________________________________
Cash flows from operating activities
Earnings from continuing operations 479 464
Adjustments to reconcile earnings from
continuing operations to cash flows
from operating activities:
Amortization expense 775 762
Net benefit plans cost 63 42
Future income taxes 61 (20)
Non-controlling interest 44 38
Contributions to employee pension plans (29) (6)
Other employee future benefit plan payments (24) (21)
Other 40 44
Changes in non-cash working capital (166) (146)
________________________
1,243 1,157
________________________
Cash flows from investing activities
Capital expenditures (688) (594)
Business acquisitions (81) (63)
Business dispositions 16 -
Decrease in investments accounted for under
the cost and equity methods 6 7
Other 20 (40)
________________________
(727) (690)
________________________
Cash flows from financing activities
Increase (decrease) in notes payable
and bank advances 19 (113)
Issue of long-term debt 1,326 1,792
Repayment of long-term debt (939) (366)
Issue of common shares 4 5
Issue of preferred shares - 510
Redemption of preferred shares - (357)
Issue of equity securities by subsidiaries to
non-controlling interest 7 73
Redemption of equity securities by subsidiaries
from non-controlling interest (43) (19)
Cash dividends paid on common and preferred shares (299) (268)
Cash dividends paid by subsidiaries to
non-controlling interest (42) (44)
Other (48) (2)
________________________
(15) 1,211
________________________
Cash provided by continuing operations 501 1,678
Cash provided by discontinued operations 288 4
________________________
Net increase in cash and cash equivalents 789 1,682
Cash and cash equivalents at beginning of period 722 306
________________________
Cash and cash equivalents at end of period 1,511 1,988
________________________
Consists of:
Cash and cash equivalents of
continuing operations 1,511 1,941
Cash and cash equivalents of
discontinued operations - 47
________________________
Total 1,511 1,988
_________________________________________________________________________
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For further information: Nick Kaminaris, Communications, (514) 786-3908,
Web site: www.bce.ca ; Sophie Argiriou, Investor Relations, (514) 786-8145 |
