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BCE reports 2009 fourth-quarter and full-year results and announces 2010 business outlook

    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.

    - 2009 increased financial guidance met or exceeded
    - Full-year net earnings applicable to common shares of $1,631 million
      compared to $819 million in 2008
    - Bell Q4 revenues grow 4.8%; Operating income grows 10%; EBITDA(1)
      grows 1%
    - HSPA network launch helps drive record Q4 wireless gross activations
      of 523,000; 39% increase in wireless net activations
    - Best quarterly Bell TV net activations in four years
    - Bell announces Fibre-to-the-home (FTTH) rollout in Québec City, launch
      of Bell IPTV service in Montréal and Toronto in 2010

MONTREAL, Feb. 4 2010 -- BCE Inc. (TSX, NYSE: BCE), Canada's
largest communications company, today reported BCE and Bell results for the
fourth quarter of 2009 and announced its guidance for 2010.
    BCE reported Q4 Bell revenue growth of 4.8%, including revenue from The
Source and Virgin, and EBITDA growth of 1.0%; healthy free cash flow; net
earnings applicable to common shares of $350 million; record Q4 wireless
gross subscriber activations and strong wireless and TV net activations.
These results demonstrate continued progress in the execution of Bell's 5
Strategic Imperatives - Improve Customer Service, Accelerate Wireless,
Leverage Wireline Momentum, Invest in Broadband Networks and Services, and
Achieve a Competitive Cost Structure.
    "The Bell team's strong execution of our service-focused strategy and
ongoing cost discipline across our business delivered strong Q4 results and
enabled us to meet or beat all of our increased financial targets for 2009,"
said George Cope, President and CEO of BCE and Bell Canada. "The 2010
financial guidance announced today reflects a well-balanced financial plan
that will generate substantial free cash flow in excess of $2 billion and
earnings growth of 6% to 10% to support the execution of our business plan
and capital markets strategy dedicated to delivering ongoing returns to BCE
shareholders."
    "In Q4, we accelerated wireless with the successful November launch of
Canada's fastest and largest mobile network, contributing to the best-ever Q4
gross activations - 523,000 - for Bell wireless and a 39% year-over-year
increase in net additions, to 163,000. We've leveraged our wireline momentum,
reducing residential local line losses again while affirming our position as
Canada's High Definition TV leader. We added 41,000 net new TV subscribers,
the highest number of quarterly Bell TV net additions in the last four years,
contributing to 113,000 net Bell TV additions in 2009," said Mr. Cope. "Our
strategic commitment to invest in broadband networks and services continues,
with both our new HSPA network introduction on the wireless side and the
significant investments in new fibre rollouts announced today that we are
undertaking to support high-speed Bell Internet and Bell TV."
    Bell today announced several initiatives supporting its strategic
imperative to invest in broadband networks and services, including the
deployment of Fibre-to-the-home (FTTH) in Québec City and new housing
developments in Ontario and Québec, the launch of its enhanced Bell Fibe(TM)
Internet service this week, and the introduction of Internet Protocol
television (IPTV) later in 2010.
    Bell will begin its three-year plan to deploy high speed
Fibre-to-the-home across the Québec City region in 2010. The build-out of
FTTH in the region can be completed quickly and economically because it is
served largely by "aerial" infrastructure - above-ground wiring on utility
poles - making the cost per home passed competitive with FTTN
(Fibre-to-the-node). Québec City is the largest urban centre in Canada to be
selected to date for the deployment of FTTH, which will offer consumers and
business customers download speeds of at least 100 Megabits per second.
    Bell also announced today it will deploy FTTH in all new urban and
suburban housing developments in Ontario and Québec beginning in the second
half of 2010. This is in addition to the company's deployment of
Fibre-to-the-building (FTTB) to MDUs (multi-dwelling units) already under
way. Bell's FTTB initiative will deliver 60 Mbps service to approximately
1,600 condominiums and apartment buildings in Ontario and Québec by the end
of 2012.
    Bell will complete its accelerated build of Fibre-to-the-node (FTTN) in
Toronto and Montréal this quarter. The company will have passed 1.8 million
homes with advanced VDSL2 capability by the end of the quarter, and 100% of
the company's FTTN network will be VDSL2 capable by the end of 2010. Bell
Fibe(TM) is a new high-speed Internet service announced this week for Bell
customers in Montréal and Toronto that takes full advantage of these fibre
advancements, offering enhanced download speeds of up to 25 Mbps and the
fastest upload speeds available in the market - up to 7 Mbps.
    The advanced FTTN network will also support the launch of competitive
Bell IPTV services in Toronto and Montréal this year, enhancing Bell's
competitive position in these core markets and complementing the company's
existing Bell TV product, which already serves approximately 2 million
Canadians from coast to coast.

Capital markets strategy

    "Our capital markets strategy was effectively executed in 2009," said
Siim Vanaselja, Chief Financial Officer of BCE and Bell Canada. "We have
maintained strong investment grade credit ratings and we improved our credit
ratios with a $500 million voluntary special pension contribution made in
December. We delivered on our commitment to increase returns to our
shareholders through three increases in the common share dividend over the
past twelve months, delivering a 19% increase overall, and the completion of
a $1 billion share buyback in May. We repaid $2.1 billion of debt in 2009
from cash on hand, further strengthening our balance sheet and enhancing
financial flexibility. We accessed the debt capital markets on attractive
terms this past June to early redeem maturing debt, resulting in interest
savings of $25 million annually for the future."
    "With a substantial cash balance of $660 million, significant ongoing
cash flow generation from operations and access to $1.4 billion in committed
credit facilities, we maintain a strong balance sheet and liquidity position
that is well aligned with growing our business and delivering enhanced
shareholder value," said Mr. Vanaselja.

2009 fourth-quarter and full-year results

    Bell's operating revenues increased by 4.8% this quarter, to $3,982
million, as higher revenues from the acquisitions of The Source and the
remaining 50% of the equity of Virgin Mobile Canada (Virgin) not already
owned by Bell and growth in TV and wireless data revenues more than offset
declines in local and access, long distance, and wireline data revenues. For
the full year, Bell's operating revenues were $15,020 million, an increase of
1.0% compared to 2008.
    Bell's operating income increased by 10.0% to $572 million this quarter
and by 13.5% to $2,432 million for the full year due to higher EBITDA and
lower restructuring and other costs. Bell's EBITDA grew by 1.0% to $1,395
million this quarter and by 1.4% to $5,719 million for the full year as
higher revenues and cost reductions more than offset the impact of higher
pension expense and increases in new wireless subscriber activation expense.
Bell's EBITDA margin decreased by 1.4 percentage points to 35.0% this quarter
but increased 0.2 percentage points to 38.1% on a full-year basis. Before
pension costs, Bell's EBITDA growth was 3.5% this quarter and 3.0% for the
full year.
    The Bell Wireless segment had record Q4 gross activations of 523,000 new
subscribers, or 11.3% more than the same period last year, even though its
new HSPA network was only launched in November. Total net activations
increased by 39.3% to 163,000. Postpaid net activations increased by 37.5% to
110,000 and prepaid net activations increased by 43.2% to 53,000. These
year-over-year increases in activations reflect the success of Bell's new
HSPA handset lineup, which includes Apple iPhone and RIM Blackberry Bold, and
growth in demand for wireless Internet sticks.
    Bell Wireless operating revenues increased by 5.7% this quarter with
service revenues increasing by 2.1% and product revenues increasing by 43.3%.
Bell Wireless operating income and EBITDA decreased by 0.7% and 2.0%
respectively. Blended ARPU(2) decreased by $1.48 to $51.08 year-over-year due
to the impact of economic pressures on customer usage, competitive moves and
lower roaming revenues, which more than offset data revenue growth of 32%.
    In the Bell Wireline segment, retail residential NAS losses improved for
a ninth consecutive quarter but total Residential NAS declined by 79,000 this
quarter, or by 11.3% more than last year, due to reduced demand for wholesale
local service. Business NAS declined by 29,000 this quarter, or 3.3% fewer
than last year. TV subscribers increased by 41,000 and high-speed Internet
subscribers increased by 8,000 this quarter.
    Bell Wireline operating revenues increased by 4.2% as TV and equipment
and other revenue growth more than offset declines in local and access, long
distance and data revenues. Equipment and other revenues more than doubled
this quarter as a result of the acquisition of The Source. Bell Wireline
operating income increased by 23.9% as a result of higher EBITDA and lower
restructuring and other costs. Bell Wireline EBITDA increased by 2.5% due to
higher revenues and cost reductions.
    With the completion of the HSPA network build, the amount of capital Bell
invested this quarter decreased to $640 million, or by 25.1%, compared to the
same period last year. Capital expenditures supported Bell's strategic
imperatives with focused investment on enhancing its wireless networks and
the continuing expansion of the wireline broadband network, including the
FTTN and FTTB programs. At year end, the FTTN network reached more than 2.9
million homes. For the full year, Bell invested $2,390 million of capital, or
2.8% less than 2008 and Bell's capital intensity was 15.9%.
    BCE's cash flows from operating activities this quarter was $948 million
compared to $1,817 million in the same period last year due to an increase in
pension plan contributions, including a $500 million voluntary contribution,
and an increase in cash tax payments. Free cash flow(3) was $15 million this
quarter compared to $647 million in the same period last year due to the
increase in pension plan contributions and cash taxes partly offset by lower
capital expenditures. For the full year, BCE's cash flows from operating
activities and free cash flow were $4,884 million and $1,456 million
respectively.
    BCE's net earnings applicable to common shares this quarter were $350
million, or $0.46 per share, compared to a net loss of $48 million, or $0.06
per share, for the same period last year. EPS in Q4 2008 included net losses
on investments of $372 million related to write-downs on non-core investments
as a result of the decline in capital market valuations experienced in the
last half of 2008. For the full year, BCE's net earnings applicable to common
shares were $1,631 million, or $2.11 per share, compared to $819 million, or
$1.02 per share.
    BCE's Adjusted EPS(4) was $0.51 this quarter, or 7.3% lower than last
year as Adjusted EPS in Q4 2008 included the favourable resolution of
uncertain tax positions. In addition, there was an increase in depreciation
and the amortization of intangible assets this quarter partly offset by the
impact of fewer outstanding BCE common shares as a result of share purchases
made through the normal course issuer bid completed in May 2009. For the full
year, BCE's Adjusted EPS was $2.50 per share, or 11.1% higher than 2008.

    Financial Highlights

    -------------------------------------------------------------------------
    ($ millions except per share amounts)   Q4 2009     Q4 2008    % change
    (unaudited)
    -------------------------------------------------------------------------
    Bell(i) Operating Revenues               $3,982      $3,798         4.8%
    -------------------------------------------------------------------------
    Bell EBITDA                              $1,395      $1,381         1.0%
    -------------------------------------------------------------------------
    Bell Operating Income                      $572        $520        10.0%
    -------------------------------------------------------------------------
    BCE Operating Revenues                   $4,650      $4,476         3.9%
    -------------------------------------------------------------------------
    BCE EBITDA                               $1,737      $1,741        (0.2%)
    -------------------------------------------------------------------------
    BCE Operating Income                       $751        $666        12.8%
    -------------------------------------------------------------------------
    BCE Cash Flows From
     Operating Activities                      $948      $1,817       (47.8%)
    -------------------------------------------------------------------------
    Free Cash Flow                              $15        $647       (97.7%)
    -------------------------------------------------------------------------
    BCE Net Earnings Applicable to
     Common Shares                             $350        ($48)        n.m.
    -------------------------------------------------------------------------
    BCE EPS                                   $0.46      ($0.06)        n.m.
    -------------------------------------------------------------------------
    BCE Adjusted EPS                          $0.51       $0.55        (7.3%)
    -------------------------------------------------------------------------
    (i)  Bell includes the Bell Wireless and Bell Wireline segments.
    n.m.: not meaningful

    BCE's operating revenues increased by 3.9% to $4,650 million this quarter
and by 0.4% to $17,735 million for the full year as higher revenues at Bell
were partly offset by lower revenues at Bell Aliant.
    BCE's operating income increased by 12.8% to $751 million this quarter
and by 11.2% to $3,191 million for the full year due to higher operating
income at Bell and Bell Aliant. BCE's EBITDA decreased by 0.2% to $1,737
million this quarter as EBITDA growth at Bell was more than offset by lower
EBITDA at Bell Aliant. For the full year, BCE's EBITDA increased by 1.2% to
$7,089 million.

Bell Wireless Segment

    With the launch of its new HSPA network, Bell Wireless delivered record
fourth quarter gross activations and strong net activations.

    - Total Bell Wireless operating revenues increased by 5.7% to
      $1,198 million this quarter. Service revenues increased by 2.1% to
      $1,055 million due to the acquisition of the remaining 50% of Virgin
      and higher wireless data revenues, partly offset by the impact of lower
      ARPU. Product revenues increased by 43.3% to $129 million due to the
      acquisition of The Source and the remaining 50% of Virgin, as well the
      impact of the launch of the new HSPA network. For the full year, total
      Bell Wireless operating revenues increased by 1.8% to $4,558 million
      with service revenues increasing by 1.1% to $4,102 million and product
      revenues increasing by 8.0% to $405 million.
    - The acquisition of the remaining 50% of Virgin was completed on
      July 1, 2009. Accordingly, beginning in Q3 2009, wireless ARPU, churn
      and cost of acquisition reflect 100% of Virgin's results. For prior
      periods, these metrics have been reported on a pro forma basis to
      reflect 100% of Virgin's results.
    - On a pro forma basis, postpaid ARPU decreased by $3.00 to $62.47 due to
      customer migration to lower rate plans, lower usage and lower roaming
      revenues as customers reacted to a weaker economy, while prepaid ARPU
      increased by $1.12 to $18.45 due to the growth of Virgin's higher ARPU
      subscriber base. Blended ARPU decreased by $1.48 to $51.08. For the
      full year, blended ARPU decreased by $1.82 to $50.88, postpaid ARPU
      decreased by $3.21 to $62.81 and prepaid ARPU decreased by $0.30 to
      $17.53.
    - Bell Wireless operating income decreased by 0.7% to $292 million this
      quarter as a result of lower EBITDA partly offset by lower
      restructuring and other costs. For the full year, Bell Wireless
      operating income increased by 3.5% to $1,284 million. Bell Wireless
      EBITDA decreased by 2.0% to $435 million this quarter due to higher
      subscriber acquisition costs associated with Q4 record gross
      activations. For the full year, Bell Wireless EBITDA increased by
      2.4% to $1,812 million.
    - EBITDA margins on wireless service revenues decreased to 41.2% this
      quarter from 43.0% last year.
    - Total gross activations were 523,000 this quarter, or 11.3% higher than
      last year.
    - Total net activations were 163,000 this quarter, or 39.3% higher than
      last year. Postpaid net activations were 110,000 this quarter, or 37.5%
      higher than last year. Prepaid net activations were 53,000, or 43.2%
      higher than last year.
    - At year end, the Bell Wireless client base reached 6,833,000, an
      increase of 5.2% over last year.
    - On a pro forma basis, postpaid and blended churn were unchanged from
      last year at 1.3% and 1.8% respectively while prepaid churn improved to
      3.2% from 3.4% last year.
    - On a pro forma basis, cost of acquisition decreased to $327 per gross
      activation this quarter, or 5.8% lower than last year.

Bell Wireline Segment

    The Bell Wireline segment delivered revenue and EBITDA growth as well as
the best quarter for TV subscriber gains in the past four years.

    - Bell Wireline operating revenues increased by 4.2% to $2,840 million
      this quarter as product revenue growth from the acquisition of The
      Source and TV revenue growth were partly offset by decreases in local
      and access, long distance and data revenues. For the full year, Bell
      Wireline operating revenues increased by 0.2% to $10,666 million.
    - Bell Wireline operating income increased by 23.9% to $280 million this
      quarter and by 27.3% to $1,148 million for the full year as higher
      EBITDA and lower restructuring and other costs more than offset higher
      depreciation and amortization of intangible assets. Bell Wireline
      EBITDA increased by 2.5% this quarter, to $960 million, due to higher
      revenues and cost reductions. For the full year, Bell Wireline EBITDA
      increased by 1.0% to $3,907 million.
    - Local and access revenues declined by 6.1% to $775 million this quarter
      due to ongoing residential and business NAS erosion.
    - Total NAS declined by 108,000 this quarter compared to a decline of
      101,000 last year. Business NAS declined by 29,000 this quarter
      compared to a decline of 30,000 last year. Although retail residential
      NAS losses improved for a ninth consecutive quarter, total Residential
      NAS declined by 79,000 this quarter, or by 11.3% more than last year,
      due to reduced demand for wholesale local service. On a year-over-year
      basis, total NAS declined by 6.1%.
    - Long distance revenues declined by 5.0% to $265 million this quarter
      due mainly to ongoing residential and business NAS erosion, pricing
      pressures in the business market, and the increased adoption of
      unlimited or large block of time plans by residential customers partly
      offset by an increase in wholesale minutes.
    - Data revenues decreased by 3.8% to $973 million this quarter as a
      decline in data equipment sales to business customers and lower legacy
      data revenues more than offset higher IP and broadband connectivity
      service revenues and residential Internet revenues.
    - High-speed Internet net activations of 8,000 this quarter were
      unchanged from last year. At year end, there were 2,057,000 high-speed
      Internet subscribers.
    - TV revenues were $417 million this quarter, or 11.2% higher than last
      year reflecting increased customer additions and upgrades to
      higher-priced programming packages, driven partly by the increased
      adoption of premium set-top boxes.
    - TV EBITDA was $120 million this quarter, or 46.3% higher than last
      year, mainly from a recovery of broadcasting Part II fees. TV EBITDA
      also increased due to higher ARPU and a larger customer base.
    - Total TV subscribers increased by 41,000 this quarter compared to an
      increase of 14,000 last year. At year end, there were 1,949,000 TV
      subscribers, an increase of 5.2% over last year.
    - TV subscriber churn remained stable at 1.3%.
    - Equipment and other revenues increased to $324 million this quarter
      from $143 million last year due to the impact of The Source
      acquisition.

Bell Aliant Regional Communications

    Bell Aliant's revenues decreased to $785 million this quarter, or by
2.6%, due to lower local and access and long distance revenues. Bell Aliant's
operating income increased by 22.6%, to $179 million as lower restructuring
and other costs and cost containment initiatives more than offset lower
revenues.

Common Share Dividend

    BCE's Board of Directors has declared a quarterly dividend of $0.435 per
common share, payable on April 15, 2010 to shareholders of record at the
close of business on March 15, 2010.

Normal Course Issuer Bid

    On December 17, 2009, BCE announced that it had received approval from
the Toronto Stock Exchange in respect of its notice of intention to make a
normal course issuer bid (NCIB) under which BCE may purchase for cancellation
up to $500 million of its common shares over the course of 2010.

Outlook

    BCE's 2010 financial guidance reflects the continued progress in the
execution of Bell's 5 Strategic Imperatives and BCE's capital markets
strategy.
    As a result of the launch of its HSPA network and other key initiatives
in 2009, Bell is expecting an improvement in the performance of its Wireless
segment in 2010. Combining this with an improving trajectory in its Wireline
business from The Source, the strength of Bell TV, and an improving outlook
in its business markets, Bell is targeting revenue growth of 1% to 2% in
2010.
    With higher revenues, lower pension expense and a focus on cost
reduction, Bell's is targeting increased EBITDA growth in 2010 of 2% to 4%.
    BCE is targeting Adjusted EPS of $2.65 to $2.75 due to higher EBITDA and
the accretive impact of the share buyback planned for 2010. With the 7%
increase to the annual common share dividend announced in December, BCE's
payout ratio is conservatively at the low end of its policy of 65% to 75% of
Adjusted EPS for 2010.
    BCE is also expecting substantial free cash flow generation in 2010. Free
cash flow of $2,000 million to $2,200 million will provide BCE with financial
flexibility to execute its capital markets strategy while maintaining robust
levels of strategic capital investment at Bell to support the growth of its
operations and further improve its competitive position.

    BCE's financial guidance for 2010 is as follows:

    -------------------------------------------------------------------------
                                                              Guidance 2010
    -------------------------------------------------------------------------
    Bell(i)
    -------------------------------------------------------------------------
    Revenue Growth                                                   1% - 2%
    -------------------------------------------------------------------------
    EBITDA Growth(ii)                                                2% - 4%
    -------------------------------------------------------------------------
    Capital Intensity                             (less than or equal to)16%
    -------------------------------------------------------------------------
    BCE
    -------------------------------------------------------------------------
    Adjusted EPS                                              $2.65 - $2.75
    Adjusted EPS Growth                                             6% - 10%
    -------------------------------------------------------------------------
    Free Cash Flow(iii)                                   $2,000 M - $2,200 M
    -------------------------------------------------------------------------
    (i)   Bell's 2010 financial guidance for revenue, EBITDA and capital
          intensity is exclusive of Bell Aliant.
    (ii)  The most comparable Canadian GAAP financial measure is operating
          income. For 2010, Bell expects EBITDA growth of 2% to 4%. This
          range reflects expected Bell operating income of approximately
          $2,900 million to $3,100 million.
    (iii) The most comparable Canadian GAAP financial measure is cash flows
          from operating activities. For 2010, BCE expects to generate
          approximately $2,000 million to $2,200 million in free cash flow.
          This amount reflects expected BCE cash flows from operating
          activities of approximately $5,400 million to $5,600 million.

Call with Financial Analysts

    BCE will hold a conference call for financial analysts to discuss its
fourth quarter results and 2010 guidance on Thursday, February 4 at 8:00 a.m.
(Eastern). Media are welcome to participate on a listen-only basis. To
participate, please dial (416) 340-8018 or toll-free 1-866-223-7781 shortly
before the start of the call. A replay will be available for one week by
dialing (416) 695-5800 or 1-800-408-3053 and entering pass code 5368205#.
    There will also be a live audio webcast of the call available on BCE's
website at: http://www.bce.ca/en/news/eventscalendar/webcasts/2010/20100204/.
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 (earnings before interest, taxes, depreciation and
        amortization of intangible assets) does not have any standardized
        meaning according to Canadian GAAP. It is therefore unlikely to be
        comparable to similar measures presented by other companies. We
        define EBITDA as operating revenues less cost of revenue and selling,
        general and administrative expenses, meaning it represents operating
        income before depreciation, amortization of intangible assets and
        restructuring and other. We use EBITDA, among other measures, to
        assess the operating performance of our ongoing businesses without
        the effects of depreciation, amortization of intangible assets and
        restructuring and other. We exclude these items because they affect
        the comparability of our financial results and could potentially
        distort the analysis of trends in business performance. We exclude
        depreciation and amortization of intangible assets because it largely
        depends on the accounting methods and assumptions a company uses, as
        well as non-operating factors such as the historical cost of capital
        assets. Excluding restructuring and other does not imply they are
        non-recurring. 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 measurement to value
        companies in the telecommunications industry. The most comparable
        Canadian GAAP financial measure is operating income. The following
        tables are reconciliations of operating income to EBITDA on a
        consolidated basis for BCE, Bell and for our Bell Wireline and Bell
        Wireless segments.


    ($ millions)

    BCE                         Q4 2009     Q4 2008        2009        2008
    -------------------------------------------------------------------------
    Operating income                751         666       3,191       2,869
    Depreciation and
     amortization of
     intangible assets              904         868       3,371       3,264
    Restructuring and other          82         207         527         871
    -------------------------------------------------------------------------
    EBITDA                        1,737       1,741       7,089       7,004
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BELL                        Q4 2009     Q4 2008        2009        2008
    -------------------------------------------------------------------------
    Operating income                572         520       2,432       2,143
    Depreciation and
     amortization of
     intangible assets              758         715       2,804       2,685
    Restructuring and other          65         146         483         810
    -------------------------------------------------------------------------
    EBITDA                        1,395       1,381       5,719       5,638
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BELL WIRELINE               Q4 2009     Q4 2008        2009        2008
    Operating income                280         226       1,148         902
    Depreciation and
     amortization of
     intangible assets              622         580       2,284       2,193
    Restructuring and other          58         131         475         773
    -------------------------------------------------------------------------
    EBITDA                          960         937       3,907       3,868
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BELL WIRELESS               Q4 2009     Q4 2008        2009        2008
    Operating income                292         294       1,284       1,241
    Depreciation and
     amortization of
     intangible assets              136         135         520         492
    Restructuring and other           7          15           8          37
    -------------------------------------------------------------------------
    EBITDA                          435         444       1,812       1,770
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    (2) The acquisition of the remaining 50% of the equity of Virgin not
        already owned by Bell was completed on July 1, 2009. Accordingly,
        beginning in Q3 2009, wireless ARPU, churn, and cost of acquisition
        reflect 100% of Virgin's results. For prior periods, these metrics
        reflected our previous 50% ownership but have been reported on a pro
        forma basis to reflect 100% of Virgin's results.

    (3) The term free cash flow does not have any standardized meaning
        according to Canadian GAAP. 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 and distributions
        received from Bell Aliant less capital expenditures, preferred share
        dividends, distributions paid by subsidiaries to non-controlling
        interest, other investing activities 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
        Canadian GAAP 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.

    ($ millions)
    -------------------------------------------------------------------------
                                Q4 2009     Q4 2008        2009        2008
    -------------------------------------------------------------------------
    Cash flows from
     operating activities           948       1,817       4,884       5,909
    Bell Aliant distributions
     to BCE                          72          72         291         290
    Capital expenditures           (760)     (1,021)     (2,854)     (2,986)
    Other investing activities      (11)          1         (89)       (726)
    Cash dividends paid on
     preferred shares               (26)        (31)       (107)       (129)
    Cash distributions paid by
     subsidiaries to
     non-controlling interest       (92)        (92)       (369)       (366)
    Bell Aliant free cash flow     (116)        (99)       (300)       (303)
    -------------------------------------------------------------------------
    Free cash flow                   15         647       1,456       1,689
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    (4) The term Adjusted net earnings does not have any standardized meaning
        according to Canadian GAAP. It is therefore unlikely to be comparable
        to similar measures presented by other companies. We define Adjusted
        net earnings as net earnings before restructuring and other and net
        losses (gains) on investments. We use Adjusted net earnings and
        Adjusted EPS, among other measures, to assess the operating
        performance of our ongoing businesses without the effects of
        after-tax restructuring and other and net losses (gains) on
        investments. 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 Canadian
        GAAP financial measure is net earnings applicable to common shares.
        The following table is a reconciliation of net earnings applicable to
        common shares to Adjusted net earnings on a consolidated basis and
        per BCE Inc. common share.


    ($ millions except per share amounts)
    -------------------------------------------------------------------------
                        Q4 2009       Q4 2008        2009          2008
    -------------------------------------------------------------------------
                              PER           PER           PER           PER
                     TOTAL  SHARE  TOTAL  SHARE  TOTAL  SHARE  TOTAL  SHARE
    -------------------------------------------------------------------------
    Net earnings
     applicable to
     common shares     350   0.46    (48) (0.06) 1,631   2.11    819   1.02
    Restructuring
     and other          48   0.06    117   0.14    339   0.44    572   0.71
    Net (gains)
     losses on
     investments       (11) (0.01)   372   0.47    (41) (0.05)   420   0.52
    -------------------------------------------------------------------------
    Adjusted net
     earnings          387   0.51    441   0.55  1,929   2.50  1,811   2.25
    -------------------------------------------------------------------------

Caution Concerning Forward-Looking Statements

    Certain statements made in this news release, including, but not limited
to, statements relating to our 2010 financial guidance (including revenues,
EBITDA, capital intensity, Adjusted EPS and free cash flow), business
outlook, objectives, plans, strategic priorities and other statements that
are not historical facts, are forward-looking. Forward-looking statements, by
their very nature, are subject to inherent risks and uncertainties and are
based on several assumptions which give rise to the possibility that actual
results 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 are made as of the date of this
release 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, these statements do not
reflect the potential impact of any non-recurring 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 the date hereof. Forward-looking statements are provided for the
purpose of providing information about management's current expectations and
plans relating, in particular, to 2010 and allowing investors and others to
get a better understanding of our operating environment. Readers are
cautioned that such information may not be appropriate for other purposes.

Material Assumptions

    A number of Canadian economic and market assumptions were made by BCE in
preparing its financial guidance and other forward-looking statements for
2010 contained in this news release, including, but not limited to: (i) a
gradual economic improvement beginning in the second half of 2010, (ii)
Canadian GDP to increase to approximately 2.6%, compared to 2009, consistent
with estimates by the six major banks in Canada, (iii) increased spending and
investment in business markets as the economic environment strengthens, (iv)
revenues generated by the residential voice telecommunications market to
continue to decrease in 2010 due, in part, to wireless substitution, which is
expected to increase in 2010 as a result, in particular, of aggressive
competitive activity by new wireless entrants having been awarded AWS
spectrum by Industry Canada and due to other factors including e-mail and
instant messaging substitution, (v) wireline competition in both the business
and residential telecommunications markets to continue in 2010 mainly from
cable companies and providers of VoIP services, (vi) wireless industry
penetration growth in 2010 similar to 2009, and (vii) TV and Internet market
growth at levels slightly lower than 2009.
    In addition, BCE's and Bell Canada's financial guidance and other
forward-looking statements for 2010 are also based on various internal
financial and operational assumptions. Our financial guidance related to Bell
(excluding Bell Aliant) is based on certain assumptions concerning Bell,
including, but not limited to: (i) residential NAS losses to at least
stabilize in 2010, compared to 2009, although the rate of wireless
substitution is expected to trend higher in response to aggressive
competition from new wireless entrants, (ii) Bell's business markets
performance, including business NAS losses, to improve in 2010, compared to
2009, mainly driven by increased spending, new installations and higher
demand for basic connectivity services by business customers consistent with
an improving economy, (iii) the November 2009 launch of our new HSPA network
to drive increased smartphone penetration and enhance the opportunity for
incremental growth in data usage and increased roaming revenues, (iv)
wireless EBITDA margin pressure from new entrant competition and increased
subscriber acquisition and retention costs, (v) wireless ARPU pressure from
new entrant competition, (vi) tight operational cost management, the
flow-through of labour reductions from 2009 and the ongoing focus on
efficiency and productivity initiatives to result in incremental savings and
contribute to the maintenance of stable EBITDA margins,(vii) improved
wireline revenues due to revenues from the acquisition of The Source,
continued strong growth in Bell's TV business, and a continued focus on
pricing discipline, (viii) Bell's cash taxes in 2010 to be approximately $200
million, (ix) Bell's 2010 total net benefit plans cost (pension expense),
which is based on a discount rate of 6.4% and a 2009 return on pension plan
assets of 15%, to be approximately $155 million, * Bell's 2010 retirement
benefit plans funding to be approximately $500 million, (xi) Bell's capital
intensity in 2010 to be less than or equal to 16%, and (xii) Bell to continue
to invest in fibre deployment to expand its wireline broadband footprint to
approximately 3.6 million households by the end of 2010.
    Our guidance related to BCE is based on certain assumptions for 2010,
including, but not limited to: (i) restructuring and other charges in the
range of $125 million to $175 million, (ii) depreciation and amortization
expense essentially unchanged when compared to 2009, (iii) an effective tax
rate of approximately 22%, and a statutory tax rate of approximately 30.6%,
(iv) EPS to be positively impacted in 2010 by the planned repurchase of up to
$500 million of common shares under BCE's normal course issuer bid announced
in December 2009, and (v) the permanent repayment of long-term debt maturing
in 2010.
    The foregoing assumptions, although considered reasonable by BCE at the
time of preparation of its financial guidance and other forward-looking
statements, may prove to be inaccurate. Accordingly, our actual results could
differ materially from our expectations as set forth in this news release.

Material Risks

    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 2010 financial
guidance, are listed below. Our ability to meet our 2010 financial guidance
essentially depends on our business performance in 2010 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 2010 financial
guidance. These risks include, but are not limited to: the intensity of
competitive activity, including the increase in wireless competitive activity
that is expected to result from Industry Canada's licensing of AWS spectrum
to new wireless entrants, and the resulting impact on our ability to retain
existing, and attract, new customers, and on our pricing and marketing
strategies and financial results; 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; our ability
to continue to implement our cost reduction initiatives and contain capital
intensity while seeking to improve customer service; our ability to respond
to technological changes and rapidly offer new products and services;
increased contributions to employee benefit plans; events affecting the
functionality of, and our ability to protect, maintain and replace, our
networks, information technology systems and software; events affecting the
ability of third-party suppliers to provide to us essential products and
services; the quality of our network and customer equipment and the extent to
which they may be subject to manufacturing defects; labour disruptions; the
potential adverse effects on our Internet and wireless businesses of the
significant increase in broadband demand; our ability to raise the capital we
need to implement our business plan, including for BCE's share buy-back
program and 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; regulatory initiatives or proceedings, litigation and changes
in laws or regulations; launch and in-orbit risks of satellites used by Bell
TV; competition from unregulated U.S. DTH satellite television services sold
illegally in Canada and the theft of our satellite television services; BCE's
dependence on the ability of its subsidiaries, joint ventures and other
companies in which it has an interest to pay dividends or make other
distributions; depending, in particular, on the prevailing economic,
competitive and technological environment at any given time, and subject to
dividends being declared by the board of directors, there can be no certainty
that BCE's dividend policy will be maintained; stock market volatility; our
ability to maintain customer service and our networks operational in the
event of the occurrence of epidemics, pandemics and other health risks;
health concerns about radio frequency emissions from wireless devices; and
loss of key employees.
    We encourage investors to also read BCE's Safe Harbour Notice Concerning
Forward-Looking Statements dated February 4, 2010, 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).
This document is also available on BCE's website at www.bce.ca.
BCE's Safe
Harbour Notice Concerning Forward-Looking Statements dated February 4, 2010
is incorporated by reference into this news release. For additional
information, please refer to the February 4, 2010 Bell Analyst Guidance Call
presentation available on BCE's website.

About BCE

    BCE is Canada's largest communications company, providing the most
comprehensive and innovative suite of communication services to residential
and business customers in Canada. Operating under the Bell and Bell Aliant
brands, the Company's services include telephone services, wireless
communications, high-speed Internet, digital television, IP-broadband
services and information and communications technology (ICT) services. BCE
shares are listed in Canada and the United States. For corporate information
on BCE, please visit www.bce.ca. For Bell product and service
information,
please visit www.bell.ca.


For further information: Media inquiries: Claire Fiset, Bell Media Relations,
(514) 870-4739, 1-877-391-2007, claire.fiset@bell.ca;
Investor inquiries:
Thane Fotopoulos, BCE Investor Relations, (514) 870-4619,
thane.fotopoulos@bell.ca

SOURCE Corporate

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