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Invest in BCE

Gordon Nixon letter to shareholders

BCE well positioned to continue leading Canada’s broadband innovation

As has been the case since Bell’s founding in 1880, BCE remains at the forefront of Canadian communications, deploying the most extensive fibre and mobile broadband infrastructure, driving research and development in communications services, and managing the voice and data connections that Canadian consumers, businesses and government rely on around the clock.

In an industry marked by rapid technological advances and rising competition, BCE is well prepared to meet the challenges and opportunities ahead. We are leveraging our scale, strategic focus and expert team to lead Canada’s broadband transformation and deliver value for our shareholders, customers and communities now and into the future.

Setting the pace in Canadian communications

BCE is committed to operating with the highest standards of corporate governance, shareholder accountability and ethical business conduct.

This dedication to corporate responsibility is also reflected in BCE’s investments in every region of the country with advanced communications services, our focus on environmental sustainability and support for people and communities nationwide with the Bell Let’s Talk mental health initiative. We are dedicated to offering a diverse and inclusive national workplace that fully reflects our communities throughout Canada.

The Bell team’s 2018 performance makes clear that we have successfully embraced the broadband future across every business segment. With strong results in broadband wireless, Internet and TV growth services, Bell built on its position as Canada’s #1 Internet provider, largest television and media company, and the communications provider of choice for Canadian business and government.

BCE invested approximately $4 billion in capital in network, service and media innovation in 2018, delivering the communications services that consumers and businesses depend on and the critical network infrastructure that drives Canada’s social and economic success.

Our capital investment program is among the most significant in any Canadian business sector, well ahead of our competitors and the most capital-efficient in the industry.

Strong financial position underpins shareholder value

BCE’s healthy balance sheet, strong $1.8-billion liquidity position and stable investment grade credit profile ensure we have the financial flexibility to execute our business plan and our capital markets objectives.

In February 2019, BCE announced a 5% increase to the common share dividend to $3.17, effective with the Q1 2019 payment on April 15. This is the 15th such increase since the end of 2008, representing total dividend growth of 117% over this period. It also marks the 11th consecutive year that BCE will deliver 5% or better dividend growth while maintaining our dividend payout ratio within the target policy range of 65% to 75% of free cash flow.

In addition, BCE undertook a $175 million repurchase of common shares in 2018 through a Normal Course Issuer Bid (NCIB) program.

Our total shareholder return since the end of 2008 has been 261%, better than most of our North American peers and more than double the return of the S&P/TSX Composite Index.

BCE reduced the cost of debt in 2018 as Bell Canada raised $1.5 billion in gross proceeds from the issuance of 7-year and 10-year medium-term note (MTN) debentures, as well as US$1.15 billion in gross proceeds from the issuance of 30-year notes in the first public debt financing by Bell Canada in the US market in more than 20 years. Together, these offerings lowered our after-tax cost of publicly issued debt securities to 3.1%.

We also reinforced the strong solvency position of our Defined Benefit (DB) pension plans with a voluntary $240 million contribution, significantly reducing the amount of our future obligations and better aligning the status of subsidiary BCE DB plans with Bell Canada’s fully funded program. We expect normal-course cash pension funding to remain stable and foresee no requirement for additional voluntary pension cash funding in 2019.

A top Canadian workplace

The Bell team has been an integral part of Canada’s growth and success for almost 140 years. Today, more than 52,000 BCE employees in every province and territory are ensuring Canadians are connected, informed and entertained wherever they may be.

We are proud to be considered a workplace of choice, one that is committed to enhancing diversity and inclusion, providing opportunities for young leaders and taking the initiative in workplace mental health. In 2018, Bell was recognized as one of Canada’s Top 100 Employers, one of Canada’s Best 50 Corporate Citizens, a Best Diversity Employer and a Top Employer for Young People.

Honoured to serve as your Chair, I am grateful to my fellow BCE board members for their tremendous wisdom and integrity, and for their dedication to the success of your company. On their behalf, I thank our President and CEO George Cope for his clear strategic vision and commitment to ensuring Bell remains at the forefront of Canadian communications now and into the future.

Your support of the company as a shareholder is critical to our ability to invest, innovate and compete, driving Canada’s technological leadership and contributing to our country’s ongoing growth and prosperity. On behalf of your board and the national Bell team, I thank you for your confidence in BCE and the Bell group of companies.

Gordon Nixon
Chair of the Board
BCE Inc.

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