BCE reports first quarter 2014 results

BCE reports first quarter 2014 results

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.


-- BCE Q1 net earnings attributable to common shareholders grow
8.7% to $615 million; Adjusted net earnings per share of $0.81,
up 5.2%
-- Free cash flow up 6.1% to $262 million on 4.1% higher Bell
EBITDA
-- Strong Bell Wireless service revenue growth of 4.7% supported
by 3.5% increase in blended ARPU, drives 7.4% higher EBITDA
-- Canada's Mobile TV leader with 1,335,000 subscribers, up 67%
year over year
-- Bell Fibe TV adds 54,680 net new customers, up 15.2%;
high-speed Internet net activations increase fourfold to
15,627; residential local access line losses improve 21.4%
-- Total TV subscribers for BCE up 8.1% to 2,529,471, including
723,891 IPTV customers
-- Improved customer service drives lower churn across all
residential and wireless services
-- Bell Media EBITDA increases 53.1%, reflecting Astral
acquisition and revenue share gain in both advertising and
broadcast distributor subscriber fees
-- Acquired prime nationwide 700 MHz wireless spectrum licences to
bring advanced broadband wireless to small towns, rural regions
and Canada's North


MONTREAL, May 6, 2014 /PRNewswire/ - BCE Inc. (TSX, NYSE: BCE), Canada's
largest communications company, today reported BCE and Bell results for
the first quarter (Q1) of 2014.






FINANCIAL HIGHLIGHTS

($ millions except per share amounts)
(unaudited) Q1 2014 Q1 2013 % change

Bell(i)

Operating revenues 4,538 4,348 4.4%

EBITDA(1) 1,708 1,641 4.1%

BCE

Operating revenues 5,099 4,919 3.7%

EBITDA 2,022 1,962 3.1%

Net earnings attributable to common
shareholders 615 566 8.7%

EPS 0.79 0.73 8.2%

Adjusted EPS(2) 0.81 0.77 5.2%

Cash flows from operating activities 982 1 040 (5.6%)

Free cash flow(3) 262 247 6.1%




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



"Bell's strategic investments in advanced broadband networks and
services, improved customer service and Canadian content development
are driving the growth services - Wireless, TV, Internet and Media -
that are rapidly transforming our business," said George Cope,
President and Chief Executive Officer of BCE and Bell. "Fast-growing
Fibe TV is increasing Bell's share of the household as it drives
significant gains in high-speed Internet additions and reductions in
Home Phone losses. Bell Media, with Astral contributing to strong
EBITDA and free cash flow growth, continues to expand its media
leadership with outstanding new Canadian programming, TV Everywhere
innovations and sports viewership growth. Wireless customers are using
smartphones and data services like never before on Canada's largest 4G
LTE network - and we're taking it further by being the first to
introduce mobile service with new 700 MHz spectrum."



"The Bell team has made great strides in executing our imperative to
improve customer service, backed by investment of approximately $600
million in new service enhancements since 2008. We've developed
innovative online and mobile service apps to enhance the customer
experience, maximized our field service fleet with state-of-the-art
dispatch and communications capabilities, and announced the opening of
3 new Bell customer service call centres in Québec and Ontario in the
last year," said Mr. Cope. "The hard work and investment is paying off,
with an array of industry measures highlighting our service progress.
That includes reductions in customer churn in all residential and
wireless services, and 7% fewer calls into our service centres compared
to Q1 of last year. Bell's journey to achieving our customer service
objectives is not over, but we are well on our way."



In its most recent North American Technographics Telecom and Devices
Online Q4 2013 survey, global research firm Forrester Research Inc.
found that Bell significantly increased its Customer Experience Index
(CEI) scores across all residential and wireless services. Bell TV,
Internet, Home Phone and Wireless all greatly improved customer
satisfaction, experiencing an average 41% increase in CEI scores from
2010 to 2013.



Bell is dedicated 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, Improve Customer Service, Accelerate Wireless, Leverage
Wireline Momentum, Expand Media Leadership, and Achieve a Competitive
Cost Structure.



"Bell begins 2014 with solid first-quarter financial results that
underline the operating momentum we have across our growth services,
especially in Wireless, residential Wireline and Media," said Siim
Vanaselja, Chief Financial Officer of BCE and Bell. "EBITDA growth in
Q1 drove strong increases in earnings and free cash flow, supporting
our strategic broadband network investments and BCE's higher common
share dividend rate for 2014. With a good start to the year across
Bell's business segments and a favourable outlook, we reconfirm our
2014 financial guidance as we remain on track with our business plan
for the year."


BCE RESULTS

BCE delivered healthy revenue and EBITDA((1)) growth of 3.7% and 3.1%, respectively, in Q1 2014 with a relatively
steady EBITDA margin((1)) of 39.7%, supported by improved year-over-year financial results at
Bell. This was partly offset by lower revenue and EBITDA at Bell
Aliant, where cost management initiatives helped to contain the adverse
impact on its overall financial performance from intense competitive
pressure.



BCE reported Q1 2014 net earnings attributable to common shareholders of
$615 million, up 8.7% from $566 million in Q1 2013, and Adjusted net
earnings((2) )of $626 million, an increase of 4.5% from $599 million last year. Net
earnings per share (EPS) of $0.79 and Adjusted EPS of $0.81 were up
8.2% and 5.2%, respectively, reflecting higher EBITDA driven by the
increased contribution of Bell's growth services (Wireless, TV,
Internet and other broadband services, and Media).



BCE's cash flows from operating activities were $982 million in Q1 2014,
compared to $1,040 million in Q1 2013, due to a decrease at Bell Aliant
which was partly offset by an increase at Bell. Free cash flow((3)) was up 6.1% to $262 million from $247 million last year, reflecting
higher Bell EBITDA and an improvement in working capital. This was
partly offset by lower dividends received in 2014 from Bell Aliant, due
to a change in its common share dividend payment dates, and higher
income taxes paid by Bell mainly as a result of no special pension
contribution tax benefit. Free cash flow per share((3)) in Q1 2014 was $0.34 per common share, compared to $0.32 per common
share last year.



At March 31, 2014, BCE (Bell Canada and Bell Aliant) served a total of
7,908,596 Wireless subscribers, up 1.2% from Q1 2013; total TV
subscribers of 2,529,471, up 8.1% (including 723,891 IPTV customers, an
increase of 67.2% compared to Q1 2013); Internet subscribers of
3,163,218, up 3.4%; and total NAS lines of 7,462,829, a decrease of
6.7%.


BELL RESULTS

Bell operating revenues increased 4.4% to $4,538 million. This was
driven by a 5.0% increase in service revenues, reflecting Astral's
contribution to Bell Media results, solid Wireless revenue growth as
well as higher TV and Internet service revenues that drove positive
Wireline residential revenue growth this quarter, which more than
offset the ongoing, but moderating, decline in traditional Wireline
voice revenues.



Growth services continued to accelerate, with our Wireless, TV, Internet
and other Wireline broadband, and Media services now delivering 83% of
operating revenues, for a 7.2%, or $251 million, increase in Q1 2014.



Bell EBITDA grew 4.1% to $1,708 million, reflecting increases of 7.4% at
Bell Wireless and 53.1% at Bell Media, moderated by a 2.9% decrease at
Bell Wireline. Bell's consolidated EBITDA margin remained stable at
37.6% in Q1 2014, compared to 37.7% last year, due to higher Wireless
average revenue per user (ARPU)((4)), diminishing Wireline voice erosion, and cost efficiencies.



Bell continued its strategic investments in industry-leading network and
services, with capital expenditures of $594 million in Q1 unchanged
year over year. This reflects the continued rapid deployment of
broadband fibre to homes, neighbourhoods and businesses in Québec and
Ontario that is fuelling the rapid expansion of Fibe TV; higher
spending on network capacity to support increasing Internet bandwidth
usage and 4G LTE mobile data consumption; and enhancements to our
client care and customer service delivery systems.


BELL OPERATING RESULTS BY SEGMENT

Bell Wireless

Bell Wireless operating revenues increased 4.5% to $1,472 million in Q1
2014 from $1,409 million last year. Service revenues grew 4.7% to
$1,364 million, driven by a higher postpaid subscriber mix in our
wireless customer base and strong growth in blended ARPU attributable
to greater data usage. Wireless data revenue increased 17.5%,
reflecting higher adoption and usage of smartphones.



Bell Wireless EBITDA increased 7.4% to $628 million, reflecting the
flow-through of strong ARPU growth and disciplined postpaid subscriber
acquisition and customer retention spending. This resulted in a 1.1%
increase in EBITDA service margin to 46.0%, our best quarterly
performance in almost five years (since Q2 2009).



-- Postpaid net additions totalled 33,964 compared to 59,497 last
year. This reflected a 6.8% decrease in postpaid gross
activations attributable to slower overall market growth as a
result of higher rate-plan pricing on new 2-year contracts
brought about by the new federal Wireless Code of Conduct and
fewer major smartphone launches during the quarter. Prepaid net
subscriber losses improved 27.5%, year over year, to 49,642,
due to fewer customer deactivations.
-- Smartphones represented 74% of total postpaid gross activations
in Q1 2014, compared to 71% in Q1 2013. This increased the
percentage of postpaid subscribers with smartphones to 74% at
March 31, 2014, compared to 65% at the end of Q1 2013.
-- Postpaid customer churn(4) improved 0.01% to 1.24%, reflecting
Bell's network quality and reach, focused investments in
customer service and retention, and fewer switchers in the
market as a result of more disciplined industry pricing and
handset discounting.
-- Bell Wireless postpaid customers totalled 6,711,656, a 3.5%
increase over last year. Total Bell Wireless customers grew
1.2% to 7,762,656.
-- Blended ARPU increased 3.5% to $57.90, driven by growing
smartphone penetration, increasing usage of data services, and
higher rate plan pricing driven by the transition from 3-year
to 2-year contracts.
-- Cost of acquisition (COA)(4) increased to $442 per subscriber
compared to $404 last year, reflecting higher sales commissions
and increased marketing costs related to Olympics advertising.
-- Retention spending in Q1 kept pace with growth in wireless
service revenues and, therefore, remained essentially
unchanged, year over year, at 10.2% compared to 10.3% last
year.
-- Bell continued to lead in cutting the cost of mobile roaming in
countries Canadians travel to the most, reducing voice and data
roaming prices for consumers travelling in Cuba and Japan in
Q1. This follows significant rate decreases for the United
States, Europe, Mexico, China, Turkey, Australia and New
Zealand, Bermuda and most Caribbean islands.
-- Industry-leading Bell Mobile TV reached 1,335,000 subscribers
in Q1 2014, up from approximately 800,000 at the same time last
year. Mobile TV video streams grew 22.5% in Q1 to more than
10.6 million, which included major events like the Super Bowl
and Sochi 2014.
-- In Q1, Bell and the Royal Bank of Canada (RBC) launched a
secure mobile payment service that enables RBC customers with
compatible Bell Mobility smartphones to make debit and credit
purchases at retail locations that accept contactless payments.
-- Bell offers customers access to Canada's largest 4G LTE mobile
network, reaching 81% of the Canadian population at the end of
Q1, and complemented by 4G HSPA+ coverage to more than 98% of
the population.
-- On April 2, 2014, Bell acquired 31 licences for 480M MHz-POP of
prime nationwide 700 MHz spectrum for $566 million, following
February's federal wireless spectrum auction, bringing Bell's
total spectrum holdings to more than 4,200M MHz-POP nationally.
That same day, Bell launched Canada's first 700 MHz spectrum
LTE service, employing lower C-block spectrum that most Bell
smartphones are compatible with today. With 700 MHz spectrum in
all national markets, Bell will expand 4G mobile broadband
service to small towns, rural locations and Canada's North,
with an objective to deliver advanced LTE to more than 98% of
the population.

Bell Wireline

Our Wireline segment progressed in its ongoing transformation, slowing
the pace of revenue and EBITDA decline in Q1 2014 with a 65%, or
40,500, improvement in the total number of residential (TV, Internet
and local access lines) net customer losses.



Led by strong Fibe TV performance, which supported significant increases
in high-speed Internet net additions and fewer residential NAS line
losses compared to last year, Bell Residential Services delivered
positive revenue growth for a second consecutive quarter. While the
rate of revenue decline at Bell Business Markets also improved year
over year, results were impacted by competitive pricing pressures and
reduced spending by large business customers indicative of a continuing
soft economy.



In addition, a significant year-over-year decrease in consumer
electronic sales at The Source, largely attributable to a
weather-driven drop in retail store traffic this winter, negatively
impacted Wireline revenues this quarter. As a result, Bell Wireline Q1
operating revenues decreased 1.8% to $2,462 million from $2,508 million
last year.



Wireline EBITDA decreased 2.9% to $930 million in Q1 and we maintained
margin at 37.8%, compared to 38.2% in Q1 2013. This represents a
notable improvement over the 4.5% EBITDA decline reported last year,
which was supported by an $18 million, or 1.2%, year-over-year
reduction in operating costs this quarter.



Approximately 1%, or $9 million, of the Wireline EBITDA decrease this
quarter was due to a decline in sales at The Source. Higher network
operating costs driven by severe weather conditions in central Canada
this winter and Olympics advertising for Sochi 2014 also contributed to
lower Wireline EBITDA in Q1 2014.



-- Bell Fibe TV added 54,680 net new customers, 15.2% more than in
Q1 2013. This brings the total number of Bell Fibe TV
subscribers to 534,110 - up 80.6% over last year.
-- The Bell Fibe TV residential service footprint grew by a
million homes over last year to reach 4.5 million at the end of
Q1.
-- Bell Satellite TV losses improved 22.0% to 26,119 as a result
of fewer retail customer deactivations, despite aggressive
customer conversion offers from cable TV competitors. This
reflects our focus on improving the customer experience with
product enhancements, including more on-demand content.
-- Combined Fibe TV and Satellite TV net additions more than
doubled, year over year, to 28,561. The Bell TV subscriber base
totalled 2,306,994 at the end of Q1 2014, a 6.3% increase over
last year.
-- High-speed Internet net customer additions increased almost
fourfold to 15,627, compared to 3,952 in Q1 2013, driven by the
pull-through of Bell Fibe TV, wholesale customer gains, and
lower residential customer churn. High-speed Internet
subscribers at the end of the quarter totalled 2,200,170, an
increase of 3.3% over last year.
-- Wireline data revenue was $1,463 million, up 2.1%, driven by
continued solid residential services growth and a 3.7% increase
in IP connectivity revenues in Bell Business Markets.
Residential data revenue was up 4.8% in Q1, reflecting higher
TV and Internet revenues, driven by stronger Fibe customer
growth, and greater demand for higher bandwidth Internet
service.
-- Residential NAS net losses improved 21.4% in Q1 to 65,638 from
83,557 last year. This was supported by strong Fibe TV attach
rates which helped to drive NAS customer retention,
contributing to an 18% increase in 3-product households this
quarter.
-- Business NAS losses increased 43.0%, up 10,706 over last year,
to 35,595, due to a greater number of deactivations in our
large business segment resulting from ongoing customer
conversion of voice lines to IP-based services and competitive
losses.
-- Total Bell NAS lines at the end of Q1 2014 were 5,141,016, down
7.1% from 5,536,493 last year. As a result, Bell's local and
access revenues declined 6.7% to $603 million, while long
distance revenues decreased 12.0% to $162 million.

Bell Media

Bell Media continued to build on its position as Canada's leading media
company with its extensive portfolio of news, sports and entertainment
programming that drove high audience levels and ratings, contributing
to strong overall financial and operating performance this quarter.



Bell Media operating revenue grew 40.7% to $722 million and EBITDA grew
53.1% to $150 million in Q1 2014. The significant year-over-year
increases reflected higher advertising and subscriber fee revenues from
the Astral acquisition, as well as the flow-through of 2013
market-based rate increases in specialty TV services and higher
revenues generated from new mobile content deals and TV Everywhere
products. Overall advertising revenue growth this quarter was moderated
by a continuing soft advertising market that saw a shift in spending to
the main broadcaster of the Sochi Winter Olympics. Higher costs for TV
programming, increased spending on in-house Canadian productions, and
sports broadcast rights agreements that continue to escalate in price
for the industry as a whole were absorbed by operating synergies from
Astral's successful integration into Bell Media.



-- Bell Media continued to win strong audiences across its
conventional and specialty TV properties. CTV completed the
winter season with 12 of the Top 20 programs nationally among
all viewers and aired a range of highly-rated Canadian
programming, including MasterChef Canada, Biteen and the JUNO
Awards.
-- TSN remains the top sports and specialty channel, growing
viewership 8% in Q1 with the return of regular-season NHL
hockey and coverage of the Sochi 2014 Winter Olympics. TSN
broadcast more than 250 hours of Sochi 2014.
-- Bell Media's slate of TV Everywhere options expanded
significantly with the TSN GO app, providing access to more
than 6,000 hours of live and on-demand sports programming on
Canada's sports leader, TSN and TSN 2. TSN GO is the latest
addition to Bell Media TV Everywhere products, which includes
TMN GO and CTV GO, with more to come.
-- The Academy of Canadian Cinema and Television recognized Bell
Media and its production partners for excellence in programming
across multiple categories at the Canadian Screen Awards,
honouring CTV National News with Lisa LaFlamme (Best National
Newscast), W5 (Gordon Sinclair Award for Broadcast Journalism),
The Amazing Race Canada (3 awards, including Best Writing in a
Reality Series), the MuchMusic Video Awards (Best Music Program
or Series) and TSN's Grey Cup coverage topping numerous sports
categories (including Best Live Sports Event) - 54 awards in
total.
-- Bell continued with its divestiture of TV and radio assets
required by the Canadian Radio-television and
Telecommunications Commission (CRTC) and the Competition Bureau
as part of their approval of Bell's acquisition of Astral. In
Q1, Bell completed the sale of 6 TV services and 2 radio
stations to Corus Entertainment Inc., 3 radio stations to Jim
Pattison Broadcast Group, and 5 radio stations to Newcap Inc.,
generating total proceeds of $538 million. Sales of the final 5
Astral TV assets to DHX Media Ltd. and V Media Group are
expected to be completed later this year, subject to closing
conditions including approval by the CRTC and termination
rights, bringing total expected asset divestiture proceeds to
more than $720 million.

BELL ALIANT RESULTS

Bell Aliant (TSX: BA) revenues decreased 1.2% to $676 million in Q1 2014
from $684 million last year, as a result of the continued declines in
voice (local and access and long distance) revenues, as well as the
adverse revenue impact from intense competitive pricing pressures in
both its consumer and business markets, that were not fully offset by
continued solid growth in data service (Internet and TV) revenues. Bell
Aliant's EBITDA decreased 2.2% to $314 million from $321 million,
despite relatively stable year-over-year operating costs, due to lower
operating revenues. For more information, please visit BellAliant.ca.


COMMON SHARE DIVIDEND

BCE's Board of Directors has declared a quarterly dividend of $0.6175
per common share, payable on July 15, 2014 to shareholders of record at
the close of business on June 16, 2014.


OUTLOOK

BCE confirmed its financial guidance targets for 2014, as provided on
February 6, 2014, as follows:








February 6 May 6
Guidance Guidance

Bell (i)

Revenue Growth 2% - 4% On track

EBITDA Growth 3% - 5% On track

Capital Intensity(4) 16% - 17% On track

BCE

Adjusted EPS $3.10 - $3.20 On track

Free Cash Flow growth 3% - 7% On track

Annual common dividend per share $2.47 $2.47

Dividend payout(4) policy 65% - 75% On track
of free cash flow





(i) Bell's 2014 financial guidance for revenue, EBITDA and capital
intensity is exclusive of Bell Aliant.





CALL WITH FINANCIAL ANALYSTS

BCE will hold a conference call for financial analysts to discuss Q1
2014 results on Tuesday, May 6 at 8:00 a.m. (Eastern). Media are
welcome to participate on a listen-only basis. To participate, please
dial (416) 340-2216 or toll-free 1-866-223-7781 shortly before the
start of the call. A replay will be available for one week by dialing
(905) 694-9451 or 1-800-408-3053 and entering pass code 9343972#.



A live audio webcast of the conference call will be available on BCE's
website at BCE Q1-2014 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 terms EBITDA and EBITDA margin do not have any standardized
meaning under IFRS. Therefore, they are unlikely to be comparable
to similar measures presented by other issuers. 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 Q1 2014
consolidated financial statements. We define EBITDA margin as
EBITDA divided by operating revenues. We use EBITDA and EBITDA
margin to evaluate the performance of our businesses as they
reflect 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.
We believe that certain investors and analysts also use EBITDA and
EBITDA margin to evaluate the performance of our businesses. EBITDA
also is one component in the determination of short-term incentive
compensation for all management employees. EBITDA and EBITDA margin
have no directly comparable IFRS financial measure. Alternatively,
the following table provides a reconciliation of net earnings
to EBITDA.









($ millions)

Q1 2014 Q1 2013

Net earnings 714 672

Severance, acquisition and other costs 38 33

Depreciation 699 675

Amortization 167 163

Finance costs 235 221

Interest expense 25 37

Interest on post-employment benefit obligations (87) (80)

Other income 231 241

Income taxes

EBITDA 2,022 1,962



BCE Operating Revenues 5,099 4,919

EBITDA Margin 39.7% 39.9%









(2) The terms Adjusted net earnings and Adjusted EPS do not have any
standardized meaning under IFRS. Therefore, they are unlikely to be
comparable to similar measures presented by other issuers. We
define Adjusted net earnings as net earnings attributable to common
shareholders before severance, acquisition and other costs, net
(gains) losses on investments, and premiums on early redemption of
debt. We define Adjusted EPS as Adjusted net earnings per BCE
common share. We use Adjusted net earnings and Adjusted EPS, and we
believe that certain investors and analysts use these measures,
among other ones, to assess the performance of our businesses
without the effects of severance, acquisition and other costs, net
(gains) losses on investments, and premiums on early redemption of
debt, net of tax and NCI. 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.









($ millions except per share amounts)

Q1 2014 Q1 2013

TOTAL PER SHARE TOTAL PER SHARE

Net earnings attributable to common
shareholders 615 0.79 566 0.73

Severance, acquisition and other costs 23 0.03 23 0.03

Net gains on investments (12) (0.01) (2) -

Premium on early redemption of debt - - 12 0.01

Adjusted net earnings 626 0.81 599 0.77









(3) The terms free cash flow and free cash flow per share do not have
any standardized meaning under IFRS. Therefore, they are unlikely
to be comparable to similar measures presented by other issuers. We
define free cash flow as cash flows from operating activities,
excluding acquisition costs paid and voluntary pension funding,
plus dividends received from Bell Aliant, less capital
expenditures, preferred share dividends, dividends paid by
subsidiaries to NCI and Bell Aliant free cash flow. We define free
cash flow per share as free cash flow divided by the average number
of common shares outstanding.









($ millions except per share amounts)

Q1 2014 Q1 2013

Cash flows from operating activities 982 1,040

Bell Aliant dividends to BCE - 48

Capital expenditures (729) (722)

Cash dividends paid on preferred shares (32) (26)

Cash dividends paid by subsidiaries to non-controlling
interest (7) (73)

Acquisition costs paid 14 10

Bell Aliant free cash flow 34 (30)

Free cash flow 262 247



Average number of common shares outstanding 776.5 775.7

Free cash flow per share 0.34 0.32






We consider free cash flow and free cash flow per share to be important
indicators of the financial strength and performance of our businesses
because they show how much cash is available to pay dividends, repay
debt and reinvest in our company. We believe that certain investors and
analysts use free cash flow to value a business and its
underlying assets. We believe that certain investors and analysts also
use free cash flow and free cash flow per share to evaluate the
financial strength and performance of our businesses. The most
comparable IFRS financial measure is cash flows from operating
activities. The table above is a reconciliation of cash flows from
operating activities to free cash flow on a consolidated basis.






(4) We use ARPU, churn, COA, capital intensity and dividend payout
ratio to measure the success of our strategic imperatives. These
key performance indicators are not accounting measures and may not
be comparable to similar measures presented by other issuers. See
section 8.2, Non-GAAP Financial Measures and Key Performance
Indicators (KPIs)- KPIs in BCE's Q1 2014 MD&A for a definition of
such KPIs.





CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements made in this news release, including, but not limited
to, statements relating to our 2014 financial guidance (including
revenues, EBITDA, capital intensity, Adjusted EPS and free cash flow),
our business outlook, objectives, plans and strategic priorities, BCE's
2014 annualized common share dividend and common share dividend policy,
our networks deployment plans, the sales of the final five Astral TV
assets, and other statements that are not historical facts, are
forward-looking. Forward-looking statements are typically identified by
the words assumption, goal, guidance, objective, outlook, project, strategy,
target and other similar expressions or future or conditional verbs such as aim, anticipate, believe, could, expect, intend, may, plan, seek, should, strive 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 and that our
business outlook, objectives, plans and strategic priorities may not be
achieved. As a result, we cannot guarantee that any forward-looking
statement will materialize and we caution you against relying on any of
these forward-looking statements. The forward-looking statements
contained in this news release describe our expectations as of May 6,
2014 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
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 May 6,
2014. 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 in this news release
for the purpose of assisting investors and others in understanding
certain key elements of our expected 2014 financial results, as well as
our objectives, strategic priorities and business outlook for 2014, and
in obtaining 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 2014
contained in this news release, including, but not limited to:


Canadian Economic and Market Assumptions


-- growth in the Canadian GDP of 2.3% in 2014, based on the Bank
of Canada's most recent estimate, a twenty basis point decrease
compared to an earlier estimate of 2.5%;
-- a faster pace of employment growth compared to 2013
-- a sustained level of wireline and wireless competition in both
consumer and business markets
-- higher, but slowing, wireless industry penetration driven by
the increasing adoption of smartphones, tablets and other 4G
devices, the expansion of LTE service in non-urban markets, the
availability of new data applications and services, as well as
population growth
-- a relatively stable advertising market for Bell Media

Assumptions Concerning our Bell Wireless Segment


-- Higher, but slowing, wireless industry penetration in Canada
-- Maintaining Bell's market share of incumbent wireless postpaid
net activations
-- Continued adoption of smartphone devices, tablets and data
applications, as well as the introduction of more 4G LTE
devices and new data services
-- Our ability to monetize increasing data usage and customer
subscription to new data services
-- Further expansion of our 4G LTE wireless network in rural areas
and in more urban markets across Canada
-- Ongoing technological improvements by handset manufacturers and
from faster data network speeds that allow customers to
optimize the use of our services
-- No material financial, operational and competitive consequences
of adverse changes in regulations affecting our wireless
business

Assumptions Concerning our Bell Wireline Segment


-- Increasing wireless and Internet-based technological
substitution
-- Aggressive residential service bundle offers from cable TV
competitors in our local wireline areas
-- Stabilizing residential NAS line erosion rate as we leverage
our broadband investment in Fibe TV 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
-- Higher revenue per household and flow-through of market-based
price increases across residential products from increasing
penetration of three-product households
-- Faster pace of employment and economic growth compared to 2013
-- Continued business customer migration to IP-based systems
-- Ongoing competitive reprice pressures in our business and
wholesale markets
-- Ability to realize cost savings from management workforce
attrition and retirements, call centre efficiencies, field
service productivity improvements, reduction in supplier
contract rates, lower print and mail costs, content cost
management and reducing traffic that is not on our own network
-- Growing consumption of OTT TV services and streaming video,
projected growth in TV Everywhere as well as the proliferation
of devices, such as tablets, that consume vast quantities of
bandwidth, will require considerable ongoing capital investment

Assumptions Concerning our Bell Media Segment


-- Relatively stable advertising market
-- Escalating costs to secure TV programming and sports content
-- Ability to successfully acquire highly-rated programming and
differentiated content
-- Market rates for specialty content generally increasing
-- Building and maintaining strategic supply arrangements for
content on all four screens
-- Full realization of cost synergies from the integration of
Astral into Bell Media
-- No material financial, operational or competitive consequences
of adverse changes in media regulation

Assumptions Concerning our Bell Aliant Segment


-- Economy continues to rebound
-- Competitive activity in both consumer and business will
continue to be intense
-- Wireless substitution for wireline services will increase in
Bell Aliant markets, but is expected to lag other regions of
Canada
-- NAS net decline stabilizing
-- Steady demand for FibreOP service driving Internet and IPTV
customer acquisition at similar levels as 2013
-- Cost reductions achieved through productivity initiatives will
continue, largely offsetting cost increases associated with
growth in IPTV customers and associated TV content costs and
normal inflationary pressures

Financial Assumptions Concerning Bell (Excluding Bell Aliant)


The following constitute Bell's principal financial assumptions for
2014:



-- the maintenance of a relatively stable consolidated EBITDA
margin;
-- increasing wireless EBITDA contribution and margin expansion;
-- an improving year-over-year rate of decline in wireline revenue
and EBITDA;
-- Bell's total post-employment benefit plans cost to be
approximately $310 million, based on an estimated accounting
discount rate of 4.9%, comprised of an estimated above EBITDA
post-employment benefit plans service cost of approximately
$220 million and an estimated below EBITDA net post-employment
benefit plans financing cost of approximately $90 million;
-- total pension plan cash funding of approximately $350 million;
-- cash taxes of approximately $600 million;
-- net interest expense of approximately $750 million;
-- net interest payments of approximately $775 million; and
-- working capital changes and severance and other costs of
approximately $175 million.

Financial Assumptions Concerning BCE


The following constitute BCE's principal financial assumptions for 2014:



-- BCE's total post-employment benefit plans cost to be
approximately $390 million, including approximately $80 million
for Bell Aliant, comprised of an estimated above EBITDA
post-employment benefit plans service cost of approximately
$280 million and an estimated below EBITDA net post-employment
benefit plans financing cost of approximately $110 million;
-- depreciation and amortization expense approximately $115
million higher compared to 2013;
-- net interest expense of approximately $900 million;
-- tax adjustments (per share) of approximately $0.04;
-- an effective tax rate of approximately 26%;
-- non-controlling interest of approximately $280 million; and
-- an annual common share dividend of $2.47 per share.


The foregoing assumptions, although considered reasonable by BCE on May
6, 2014, 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 2014 financial guidance, are listed below. The
realization of our forward-looking statements, including our ability to
meet our 2014 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, and the resulting impact
on our ability to retain existing customers and attract new
ones, as well as on our pricing strategies, financial results
and operating metrics such as ARPU
-- the level of technological substitution and the presence of
alternative service providers, contributing to reduced
utilization of traditional wireline voice services
-- the adverse effect of new technology and increasing
fragmentation in Bell TV's TV distribution market and
Bell Media's TV and radio markets
-- variability in subscriber acquisition and retention costs based
on subscriber acquisitions, retention volumes, smartphone sales
and handset discount levels
-- regulatory initiatives and proceedings, government
consultations and government positions that affect us and
influence our business
-- economic and financial market conditions, the level of consumer
confidence and spending, and the demand for, and prices of, our
products and services
-- Bell Media's significant dependence on continued demand for
advertising, and the potential adverse effect thereon from
economic conditions, cyclical and seasonal variations and
ratings/audience levels
-- the complexity of our product offerings, pricing plans,
promotions, technology platforms and billing systems
-- our failure to satisfy customer expectations and build a low
cost operational delivery model
-- our failure to carry out wireline network evolution activities,
and to meet network upgrade or deployment timelines within our
capital intensity target
-- our failure to maintain network operating performance in the
context of significant increases in broadband demand and in the
volume of wireless data-driven traffic
-- our failure to anticipate and respond to technological change,
upgrade our networks and rapidly offer new products and
services
-- our failure to implement or maintain, on a timely basis,
effective information technology (IT) systems, and the
complexity and costs of our IT environment
-- our inability to protect our data centres, electronic and
physical records and the information stored therein
-- employee retention and performance, and labour disruptions
-- our failure to execute our strategic imperatives and business
development plans in order to produce the expected benefits,
including to continue to implement our targeted cost reduction
initiatives
-- ineffective change management resulting from restructurings and
other corporate initiatives, and the failure to successfully
integrate business acquisitions and existing business units
-- pension obligation volatility and increased contributions to
post-employment benefit plans
-- events affecting the ability of third-party suppliers to
provide to us, and our ability to purchase, critical products
and services
-- the quality of our network and customer equipment and the
extent to which they may be subject to manufacturing defects
-- events affecting the functionality of, and our ability to
protect, test, maintain and replace, our networks, equipment
and other facilities
-- in-orbit risks of satellites used by Bell TV
-- unfavourable resolution of legal proceedings and, in
particular, class actions
-- unfavourable changes in applicable laws
-- our capital and other expenditure levels, financing and debt
requirements and inability to access adequate sources of
capital and generate sufficient cash flows from operations to
meet our cash requirements and implement our business plan, as
well as our inability to manage various credit, liquidity and
market risks
-- our inability to discontinue certain services as necessary to
improve capital and operating efficiencies
-- our failure to evolve practices and effectively monitor and
control fraudulent activities
-- the theft of our direct-to-home (DTH) satellite TV services
-- copyright theft and other unauthorized use of our content
-- higher taxes due to new taxes, higher tax rates or changes to
tax laws, and our inability to predict the outcome of
government audits
-- health concerns about radio frequency emissions from wireless
devices and equipment
-- our inability to maintain customer service and our networks
operational in the event of the occurrence of epidemics,
pandemics and other health risks
-- BCE's dependence on the ability of its subsidiaries, joint
arrangements and other entities in which it has an interest to
pay dividends or otherwise make distributions to it
-- uncertainty as to whether dividends will be declared by BCE's
board of directors or BCE's dividend policy will be maintained
-- stock market volatility


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 2013 Annual MD&A dated March 6, 2014
(included in the BCE 2013 Annual Report) and BCE's 2014 First Quarter
MD&A dated May 5, 2014, for additional information with respect to
certain of these and other assumptions and risks, filed by BCE with the
Canadian provincial securities regulatory authorities (available at Sedar.com) and with the U.S. Securities and Exchange Commission (available at SEC.gov). These documents are also available at 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
#1 television network, and the country's most-watched specialty
channels. To learn more, please visit BCE.ca.



The Bell Let's Talk mental health initiative is a national charitable
and awareness program promoting mental health across Canada with the
Bell Let's Talk Day anti-stigma campaign and significant Bell funding
of community care and access, research, and workplace initiatives. 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 BCE INC.

BCE INC.

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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