BCE reports 2012 third quarter results

BCE reports 2012 third quarter results


-- Bell EBITDA(1) increases 5.2%, reflecting strong contributions
from Bell Wireless and Bell Media
-- Wireless postpaid net activations of 148,502, up 17.1%;
Wireless EBITDA growth of 15.2% is best Q3 performance in 5
years; smartphone users now represent 60% of postpaid
subscribers, driving 4.2% higher wireless ARPU and data revenue
growth of 29.5%
-- Bell Fibe TV net activations of 42,973 as service footprint
expands to more than 2.8 million households; high-speed
Internet net activations of 13,416; 11.3% year-over-year
improvement in residential local access line losses
-- Bell Media revenue up 25.5%, EBITDA increased 92.6%
-- Wireline EBITDA margin of 39.0% supported by $40 million
year-over-year reduction in operating costs
-- BCE net earnings attributable to common shareholders of $569
million or $0.74 per share; adjusted net earnings per share(2)
of $0.76 in line with plan
-- Reconfirming all 2012 BCE and Bell Canada financial guidance
targets



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


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



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



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



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



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



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



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


Bell Q3 operational performance

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



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



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



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



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



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


BCE results

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



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



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



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






Financial Highlights

($ millions except per share amounts)
(unaudited) Q3 2012 Q3 2011 % change

Bell (i)

Operating Revenues 4,392 4,313 1.8%

EBITDA 1,688 1,605 5.2%

BCE

Operating Revenues 4,982 4,910 1.5%

EBITDA 2,019 1,941 4.0%

Net Earnings Attributable to Common
Shareholders 569 642 (11.4%)

EPS 0.74 0.83 (10.8%)

Adjusted EPS 0.76 0.93 (18.3%)

Cash flows from operating activities 1,589 1,916 (17.1%)

Free Cash Flow 684 1,005 (31.9%)

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






Bell Wireless

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



-- Bell Wireless operating revenues increased 7.1% in the third
quarter of 2012 to $1,434 million. Service revenue was up 6.4%
to $1,307 million due to the larger postpaid subscriber base
and growth in wireless data usage. Product revenue increased
10.8% in the quarter to $113 million as a result of a higher
percentage of smartphones in the sales mix.
-- Blended ARPU was $57.30 per month in Q3 2012, up 4.2% from
$55.01 per month in Q3 2011, due to an increased postpaid mix,
a higher proportion of postpaid customers using smartphones,
which drove mobile data revenue growth of 29.5%, and a greater
number of higher-ARPU postpaid customers from western Canada.
-- Smartphone subscribers represented 60% of the total postpaid
base at the end of Q3, compared to 43% last year.
-- Bell Wireless EBITDA reached $554 million in the third quarter,
up 15.2%, the highest Q3 rate of growth in 5 years. The
increase is mainly attributable to 7.1% higher wireless
operating revenues and operating cost growth of 2.6%,
reflecting disciplined spending on postpaid customer
acquisition and retention.
-- EBITDA margin as a percentage of wireless service revenue
increased 3.2 percentage points to 42.4% in Q3 on significant
service revenue flow-through and cost control.
-- Cost of acquisition per gross activation increased to $397, up
just 1.3% from Q3 2011, due to increased spending on
advertising and higher sales-related costs.
-- Postpaid gross activations increased slightly to 372,574 this
quarter compared to 372,346 in Q3 2011. Activations in western
Canada increased due to more points of distribution and
increased advertising, even as some customers delayed purchases
in anticipation of the Apple iPhone 5 launch on September 21.
-- Prepaid gross activations decreased 23.0% to 118,122 due
primarily to aggressive acquisition offers from competitors
targeted at lower-ARPU subscribers and Bell's continued focus
on acquiring postpaid customers.
-- Blended churn rate improved to 1.6% in the quarter from 2.0% in
Q3 2011. Postpaid churn decreased to 1.2% from 1.5%, reflecting
the positive impact of retention spending and lower customer
deactivation rates on smartphones compared to other devices.
Prepaid churn declined to 3.3% from 3.9% as a result of fewer
customer deactivations.
-- Postpaid net activations increased 17.1% this quarter to
148,502 from 126,854 in Q3 2011, while prepaid net customer
losses decreased to 18,738 in Q3 2012 from 41,105 last year.
-- The Bell Wireless client base reached 7,576,027 at the end of
Q3 2012, a 2.8% increase over last year.
-- Bell continues to offer customers access to Canada's largest 4G
LTE network, now reaching more than 61% of the Canadian
population in more than 40 markets across 7 provinces and
territories. LTE complements Bell's 4G HSPA+ and enhanced 4G
HSPA+ DC (Dual Cell) networks, offering coast-to-coast coverage
to more than 97% and more than 83% of the Canadian population,
respectively.
-- Bell introduced several new smartphones, including Apple's
iPhone 5, Motorola's ATRIX HD LTE and RAZR V, and the Sierra
Wireless 763 4G LTE Turbo Hotspot.



Bell Wireline

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



-- Bell Wireline revenues totalled $2,505 million, down 4.0% from
Q3 2011. The decline reflects a decrease in local and access,
long distance and equipment and other revenues, offset by
slightly higher year-over-year data revenues.
-- Data revenues increased 0.1% to $1,386 million due mainly to
higher TV revenue driven by strong subscriber growth in Fibe
TV.
-- Local and access revenues declined 7.9% to $654 million. Total
NAS at the end of the quarter was 5,768,609, a 7.0% decline
year over year, attributable to increased competition and a
reduction in access lines and digital circuits as customers
continue to adopt wireless and IP-based technologies.
-- Long distance revenues declined 13.9% to $192 million. The
year-over-year decline reflected fewer minutes of use by
residential and business customers resulting from NAS line
losses and technology substitution, ongoing rate pressures, and
decreased sales of global long distance minutes.
-- Equipment and other revenue decreased 8.0% to $195 million due
mainly to lower year-over-year legacy wireline
telecommunications equipment sales, promotional offers on TV
set-top boxes, and lower consumer electronic equipment sales at
The Source.
-- Bell Wireline EBITDA was $978 million, down 6.2% year over year
on lower operating revenues, partly offset by a 2.6%
improvement in operating costs. EBITDA margin was 39.0% this
quarter compared to 40.0% in Q3 2011.
-- TV net activations totalled 15,846 compared to 26,169 in Q3
2011. Bell Fibe TV added 42,973 net new customers compared to
20,297 in the third quarter of 2011. Bell Fibe TV subscribers
passed 200,000 this quarter as the Fibe TV footprint reached
over 2.8 million households at the end of Q3. This was
moderated by lower satellite TV net activations, due to the
rollout of IPTV by competing service providers, aggressive
customer conversion offers from cable competitors, and Bell
customer migrations to Fibe TV.
-- The Bell TV subscriber base totalled 2,136,765 at the end of
Q3, a year-over-year increase of 2.9%.
-- Bell added 13,416 new net high-speed Internet customers in Q3,
compared to a net loss of 101 last year. The improvement
reflects the pull-through effect of service bundle offers that
include Fibe TV, enhanced competitive offers, and continued
broadband fibre network expansion, all of which contributed to
lower customer churn year over year.
-- NAS net losses in the third quarter of 2012 decreased to
109,280 from net losses of 110,629 in the third quarter of
2011, reflecting residential NAS line losses of 84,540, 11.3%
fewer than last year, as Bell continued to reduce residential
NAS turnover in Fibe TV service areas. Business access losses
increased to 24,740 from 15,362 in Q3 2011.



Bell Media

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



-- Bell Media's operating revenue increased 25.5% this quarter to
$546 million from $435 million last year.
-- Not including the Olympics, advertising sales in Q3 across Bell
Media's television, radio and digital media properties
continued to be impacted by a soft advertising market as a
result of a slow-growing economy.
-- Bell Media EBITDA increased 92.6% to $156 million, from $81
million in Q3 2011, due to higher operating revenues and lower
overall operating costs.
-- The financial impact from the NHL lockout was not material this
quarter.
-- CTV closed the season with more Top 20 rated programs in Canada
than its competitors in key demos for the summer measurement
period.
-- In Q3, Bell Media websites streamed more than 177 million
videos, welcomed an average of more than 3.5 million unique
visitors each month, and served a total of 121 billion page
views.



Astral Update

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


Maple Leaf Sports & Entertainment (MLSE) transaction completed

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


Acquisition of Q9 Networks completed

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


Bell partners with Cirque du Soleil in new Québec-based content
development company

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


Bell Let's Talk mental health update

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


Bell Aliant Regional Communications

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


Common Share Dividend

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


Outlook

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






February 9 August 8 Current Guidance
2012 Guidance Guidance Guidance Expectation

Bell(i)

Revenue Growth 3% - 5% Lower end On track

EBITDA Growth 2% - 4% Higher end On track

Capital Intensity <=16% ~16% On track

BCE

Adjusted EPS (ii) $3.13 - $3.18 $3.15 - $3.20 On track

Free Cash Flow
(iii) $2.35B - $2.5B No change On track

Annual common
dividend per share $2.17 $2.27 On track

Dividend payout
ratio (iv)

- Adjusted EPS approx. 69% No change On track

- Free cash flow approx. 69% No change On track







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

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

(iii) Free cash flow before common share dividends and including
dividends from Bell Aliant.

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






Call with Financial Analysts

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



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


Notes

The information contained in this news release is unaudited.






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

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

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







(In millions of Canadian dollars)

Q3 2012 Q3 2011

Net earnings 689 736

Severance, acquisition and other costs 24 130

Depreciation 674 628

Amortization 180 180

Finance costs

Interest expense 223 210

Interest on employee benefits obligations 243 247

Expected return on pension plan assets (267) (259)

Other expense (income) 5 (11)

Income taxes 248 80

EBITDA 2,019 1,941







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

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

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

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







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

Q3 2012 Q3 2011

PER PER
TOTAL SHARE TOTAL SHARE

Net earnings attributable to common
shareholders 569 0.74 642 0.83

Severance, acquisition and other costs 19 0.02 82 0.10

Adjusted net earnings 588 0.76 724 0.93







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

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

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

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

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







(In millions of Canadian dollars)

Q3 2012 Q3 2011

Cash flows from operating activities 1,589 1,916

Bell Aliant dividends/distributions to BCE 48 48

Capital expenditures (832) (814)

Cash dividends paid on preferred shares (27) (31)

Cash dividends/distributions paid by subsidiaries
to non-controlling interest (85) (75)

Acquisition costs paid 39 7

Bell Aliant free cash flow (48) (46)

Free cash flow 684 1,005






Caution Concerning Forward-Looking Statements

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



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


Material Assumptions

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


Canadian Economic and Market Assumptions


-- Growth in the Canadian economy of 2.2% in 2012 based on the
Bank of Canada's most recent estimate, a 10 basis point
increase compared with an earlier estimate of 2.1%;
-- continued weak product sales, reflecting deferred business
customer spending given the slow pace of economic growth;
-- a continued soft advertising market for Bell Media;
-- an ongoing intense level of wireline competition in both
consumer and business markets;
-- higher wireline replacement, due primarily to increasing
wireless and Internet-based technological substitution; and
-- wireless industry penetration gain of 4 to 5 basis points in
2012 driven, in particular, by increased competition, the
accelerating adoption of smartphones, tablets and data
applications, as well as by the introduction of more LTE
devices.



Operational Assumptions Concerning Bell Wireline (excluding Bell Aliant)


-- Stabilizing residential NAS line erosion rate as we leverage
our broadband investment in IPTV to drive three-product
household penetration, increase our MDU market share, and
generate higher pull-through attach rates for our residential
Internet and home phone services;
-- in particular, targeted retention and service bundle offers,
customer win backs and better service execution to contribute
to the improvement in residential NAS line losses year over
year, subject to the risk of more aggressive service bundle
offers from our cable TV competitors and marketing actions from
the newer wireless entrants which could lead to higher
residential NAS line losses;
-- increased subscriber acquisition at Bell TV to be driven by
increased customer adoption of Fibe TV, and our ability to seek
greater penetration within the MDU market, capitalize on our
extensive retail distribution network, which includes The
Source, and capitalize on our market leadership position in
high definition (HD) programming;
-- improved subscriber acquisition at Bell Internet to be driven
by pull-through from Fibe TV and increased adoption of Fibe
Internet packages as we leverage our expanding broadband fibre
network to offer higher-speed service to customers in more
areas;
-- gradual business improvement in the performance of our Business
Markets unit in 2012, based on increased business customer
spending on ICT technology driven by an improving economy,
subject to the risk of business customers adopting more
conservative strategies which could result in lower capital
spending requirements, deferral of ICT projects and increased
NAS erosion;
-- cost savings and labour efficiency gains to be achieved from a
reduced management workforce, lower corporate support group
costs, renegotiated contracts with our vendors and outsource
suppliers, client care and field service productivity
improvements, managing content costs and reducing traffic that
is not on our own network;
-- continued customer migration to IP-based systems and
competitive re-price pressures in our business and wholesale
markets;
-- increasing EBITDA contribution from growth services; and
-- approximately 3.3 million Bell Fibe TV-ready households by the
end of 2012.



Operational Assumptions Concerning Bell Wireless (excluding Bell Aliant)


-- Bell Wireless to benefit from the flow-through of significant
investments made in 2011 in customer acquisition and retention,
along with continued acceleration in smartphone activations and
data usage;
-- incumbents and newer wireless entrants to continue aggressive
competition in 2012 and newer wireless entrants to continue
enhancing the breadth and reach of their networks, improving
their distribution reach and expanding their device portfolios;
-- wireless revenue growth to be underpinned by ARPU driven by a
higher mix of smartphone and higher-value postpaid customers,
increased distribution in western Canada, new services, and
continued disciplined price management;
-- Bell Wireless to benefit from ongoing technological
improvements by manufacturers in our handset and device lineup
and from faster data speeds that are allowing our clients to
optimize the use of our services;
-- Bell Wireless to maintain a reasonable market share of the
incumbent wireless postpaid market; and
-- higher subscriber acquisition and customer retention costs, as
well as the continued deployment of our wireless LTE network in
urban markets while continuing to leverage our wireless
high-speed packet access plus (HSPA+) network.



Operational Assumptions Concerning Bell Media


-- Building and maintaining strategic supply arrangements for
content on four screens, successfully acquiring high-rated
programming and differentiated content to execute on Bell's
multi-screen content strategy, producing and commissioning
high-quality Canadian content, and producing market-leading
news;
-- revenue growth in our specialty service operations to be driven
by market-based rates charged to broadcast distributors;
-- increased costs to secure content in our sports broadcast
operations as we face greater competition from both new and
established entrants, and as market rates for specialty content
generally increase;
-- investment in programming and marketing in combination with
ongoing investment in high definition services;
-- maintaining our favourable market position in our radio
operations by leveraging strategic investments made in 2011;
and
-- the achievement of productivity gains and other operating
efficiencies related to Bell Media integration synergies.



Financial Assumptions Concerning Bell (excluding Bell Aliant) and BCE


-- Bell's total employee benefit plans cost to be approximately
$90 million, based on an estimated accounting discount rate of
5.1% and an expected return on plan assets of 6.75%, comprised
of an estimated above EBITDA employee benefit plans service
cost of approximately $170 million and an estimated below
EBITDA net employee benefit finance return of approximately
$100 million;
-- Bell's total pension plan cash funding to be approximately $375
million;
-- Bell's cash taxes to be approximately $300 million;
-- net interest paid to be approximately $675 million;
-- BCE's total employee benefit plans cost to be approximately
$150 million, including approximately $60 million for Bell
Aliant, comprised of an estimated above EBITDA employee benefit
plans service cost of approximately $250 million and an
estimated below EBITDA net employee benefit finance return of
approximately $100 million;
-- depreciation and amortization expense approximately $125
million higher compared to 2011;
-- severance, acquisition costs and other of approximately $100
million;
-- an effective tax rate of approximately 22%;
-- tax adjustments (per share) of $0.18; and
-- an annual common share dividend of $2.27 per share.




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


Material Risks

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



-- the intensity of competitive activity, including the increase
in wireless competitive activity resulting from new wireless
entrants and their ability to expand services, and the
resulting impact on our ability to retain existing customers
and attract new ones, as well as on our pricing strategies,
ARPU and financial results;
-- the level of technological substitution contributing to reduced
utilization of traditional wireline voice services and the
increasing number of households that use only wireless
telephone services;
-- the increased adoption by customers of alternative TV services;
-- variability in subscriber acquisition and retention costs based
on subscriber acquisitions, retention volumes, smartphone sales
and subsidy levels;
-- regulatory initiatives or proceedings,litigation, changes in
laws or regulations and tax matters;
-- general economic and financial market conditions, the level of
consumer confidence and spending, and the demand for, and
prices of, our products and services;
-- our ability to implement our strategies and plans in order to
produce the expected benefits, including our ability to
continue to implement our cost reduction initiatives and
contain capital intensity while seeking to improve customer
service;
-- our ability to anticipate and respond to technological change,
upgrade our networks and rapidly offer new products and
services;
-- our failure to maintain network operating performance including
as a result of the significant increase in broadband demand and
in the volume of wireless data driven traffic;
-- events affecting the functionality of, and our ability to
protect, maintain and replace, our networks, equipment,
facilities, IT systems, software and other assets;
-- our failure to implement, on a timely basis, or maintain
effective IT systems and the complexity and costs of our IT
environment;
-- the complexity of our product offerings and pricing plans;
-- events affecting the ability of third-party suppliers to
provide to us, and our ability to purchase, essential products
and services;
-- the quality of our network and customer equipment and the
extent to which they may be subject to manufacturing defects;
-- ineffective management of changes resulting from restructurings
and other corporate initiatives and from the integration of
business units and business acquisitions;
-- increased contributions to employee benefit plans;
-- labour disruptions;
-- capital and other expenditure levels, financing and debt
requirements and our ability to raise the capital we need to
implement our business plan, including for BCE's dividend
payments and to fund capital and other expenditures and
generally meet our financial obligations;
-- our ability to discontinue certain traditional services as
necessary to improve capital and operating efficiencies;
-- launch and in-orbit risks of satellites used by Bell ExpressVu
Limited Partnership;
-- the theft of our satellite television services;
-- Bell Media's significant dependence on continued demand for
advertising, and the potential adverse effect thereon from
challenging economic conditions, cyclical and seasonal
variations and competitive pressures;
-- the adverse effect of new technology and increasing
fragmentation in Bell Media's television and radio markets;
-- potential increases in royalties payable by Bell Media under
licences pursuant to the Copyright Act;
-- health concerns about radio frequency emissions from wireless
devices;
-- our ability to maintain customer service and our networks
operational in the event of the occurrence of environmental
disasters or epidemics, pandemics and other health risks;
-- employee retention and performance;
-- BCE's dependence on the ability of its subsidiaries, joint
ventures and other companies in which it has an interest to pay
dividends and make other distributions;
-- there can be no certainty that dividends will be declared by
BCE's board of directors or that BCE's dividend policy will be
maintained;
-- stock market volatility; and
-- the completion of our proposed acquisition of Astral issubject
to closing conditions, termination rights and other risks and
uncertainties, including, without limitation, regulatory
approvals, including from the CRTC and Competition Bureau;
consequently, there can be no certainty that the transaction
will occur or that it will occur on the terms and conditions
currently contemplated and, should the transaction proceed,
that anticipated benefits will be realized.




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



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


About BCE

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



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



 


SOURCE BELL CANADA

BELL CANADA

CONTACT: Media inquiries:
Jean Charles Robillard
Bell Communications
(514) 870-4739
jean_charles.robillard@bell.caInvestor inquiries:
Thane Fotopoulos
BCE Investor Relations
(514) 870-4619
thane.fotopoulos@bell.ca


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