BCE Announces First Quarter Results Showing Strong Growth From Core Operations.

Business Editors

VANCOUVER, B.C.--(BUSINESS WIRE)--April 25, 2001

BCE (NYSE:BCE) (TSE:BCE.)

-- Total company: cash baseline earnings up 29% - revenue up 6% - EBITDA up 4%

-- Core operations: cash baseline earnings up 34% - revenue up 12% - EBITDA up 10%

BCE reported a 29% increase in cash baseline earnings to $302 million, $0.37 per common share, in the first quarter ended March 31, 2001, compared with proforma (see note 1) cash baseline earnings for the same quarter last year.

Total revenue was $5.5 billion, a 6% increase compared with proforma revenue of last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.8 billion, up 4% compared with proforma EBITDA for the first three months of 2000.

"This is the first full quarter of operation of BCE's new structure and our results demonstrate our commitment to execute well on our strategy," said Jean C. Monty, Chairman and Chief Executive Officer of BCE Inc. "Our core operations - Bell Canada, Bell Globemedia, Teleglobe and BCE Emergis - all contributed strong results achieving a revenue increase of 12%, EBITDA growth of 10%, and baseline earnings growth of 34%."

Operational Highlights (Q1 2001 vs. Q1 2000, unless indicated)

      -- DSL High Speed Internet subscribers grew 39% over Q4 2000 to
466,000;
      -- Bell Canada's data revenue was up 31% to $810 million;
      -- Cellular and PCS subscribers; grew 30% to reach 2.9 million;
      -- Bell ExpressVu subscribers grew 70% to 796,000;
      -- Bell Globemedia revenue was up 11% to $306 million;
      -- Teleglobe data revenue grew 43% to $153 million;
      -- BCE Emergis revenue reached $143 million.

Mr. Monty commented: "Bell's continued investments in key growth markets delivered a record 130,000 new DSL High Speed Internet subscribers in the quarter; 114,000 new cellular and PCS subscribers; and increasing data revenue. Bell ExpressVu subscribers have now surpassed the 800,000 mark and we are well on our way to reach one million by year-end."

"Bell Globemedia is reinforcing its national presence with the announced purchase of television stations in Montreal and Winnipeg. BCE Emergis is pursuing its U.S. expansion and Teleglobe announced a major North American network build-out."

Net earnings applicable to common shares were $962 million in the first quarter of 2001 while cash baseline earnings applicable to common shares were $302 million. Baseline adjustments for the quarter were $660 million and included an after-tax gain of $2.9 billion on the sale of Nortel Networks shares and the settlement of forward contracts relating to these shares; a write down of $2.0 billion of goodwill and other assets in Excel Communications group; an after-tax charge of $114 million ($143 million at Bell Canada) principally relating to restructuring at Bell Canada; and other net charges totaling $78 million including goodwill expense, results of BCI and other net gains.

OUTLOOK

With the change in global market conditions, Teleglobe is revising its build out strategy to take advantage of price reductions and available capacity. As a result, the cost of the GlobeSystem build out is now expected to decline approximately 30% from $7B (US$5B) to $5.3B (US$3.4B). For 2001, capital expenditures will be reduced from $3.1B (US$2B) to $2.2B (US $1.4B).

Due to market uncertainty, compounded by the slowing of the data market, Teleglobe is revising its year- end EBITDA estimates and now anticipates EBITDA to be between $140M (US $90M) and $170M (US $110M).

Notwithstanding the lowered estimates for Teleglobe, BCE's overall guidance for the year remains unchanged and management believes it is on track to meet the lower end of its guidance.

For the second quarter, BCE expects revenue in the $5.6B to $6B range; EBITDA in the $1.8B to $2.0B range and cash baseline earnings per share in the $0.36 to $0.39 range.

RESULTS BY BUSINESS GROUP (unaudited)

BCE's activities are organized around five business groups: Bell Canada (Canadian connectivity), Bell Globemedia (content), Teleglobe (global connectivity),

BCE Emergis (commerce) and BCE Ventures (other investments).

                                                          ($ millions)
                                                         First Quarter
                                             ------------------
For the period ended March 31                    2001      2000
---------------------------------------------------------------
Revenue
Bell Canada(1)                                  4,107     3,686
Bell Globemedia(1)                                306       276
Teleglobe(1)                                      506       501
BCE Emergis                                       143        73
BCE Ventures(1)                                   658       901
Corporate, Intercompany eliminations,
 and Other                                      (214)     (251)
Total revenue                                   5,506     5,186

Cash baseline earnings(2)
Bell Canada(1)                                    272       244
Bell Globemedia(1)                                  3       (3)
Teleglobe(1, 3)                                   (3)      (23)
BCE Emergis                                         6       (3)
BCE Ventures(1)                                     -        15
Corporate, Intercompany eliminations,
 and Other                                         24         4
                                             ---------  -------
Cash baseline earnings applicable to
 common shares                                    302       234
Cash baseline earnings per common share          0.37      0.29
---------------------------------------------------------------

1. Proforma results for the first quarter of 2000 reflect BCE's new organizational structure and consolidate Teleglobe Inc., CTV (including NetStar), The Globe and Mail and Globe Interactive.

2. BCE is reporting on a "cash baseline earnings" basis which excludes baseline adjustments.

3. Beginning in 2001, cash baseline earnings for Teleglobe (Teleglobe Communications group) are reflected in the Teleglobe segment and cash baseline earnings for Excel are reflected in BCE Ventures. For 2000, cash baseline earnings for Teleglobe Inc., which includes Teleglobe, Excel and Corporate, are presented in the Teleglobe segment.

FIRST QUARTER REVIEW (Q1 2001 vs Q1 2000, unless indicated)

BELL CANADA (Canadian Connectivity)

The Bell Canada segment includes Bell Canada, Bell ExpressVu, Aliant and Bell Canada's interests in Manitoba Telecom Services and other Canadian telcos.

Bell Canada

-- Operating revenue was up 11% to $4.1 billion in the first quarter due mainly to strong growth in data, driven by IP/Broadband revenue, and increased revenue from wireless services, SmartTouch features and DTH (Bell ExpressVu) services. Local and access services revenues were essentially flat at $1.5 billion. Long distance services revenue decreased by 3% to $696 million. Data revenue increased 31% to $810 million.

-- Wireless revenue was up 23% to $409 million due primarily to strong growth in new activations. There were 114,000 net additions in the quarter, a 133% increase over the same period last year. Furthermore, Bell is leading the market with the lowest churn in the industry.

-- Bell ExpressVu had revenue of $109 million in the quarter. Subscribers increased by 74,000, a 10% increase over the previous quarter. Bell ExpressVu has 58% of the DTH market in Canada.

-- Total cash operating expenses were up 15% to $2.5 billion due mainly to increased expenses associated with increased revenue.

-- Bell's EBITDA grew 7% in the first quarter to $1.6 billion. Excluding Bell ExpressVu, EBITDA grew 8% to $1.7 billion.

Bell Canada reported statutory revenue of $3.4 billion in the first quarter. Statutory net earnings applicable to common shares were $645 million for the same period and included earnings from one-time items of $262 million.

BELL GLOBEMEDIA (Content)

Bell Globemedia includes CTV, The Globe and Mail, Sympatico-Lycos and Globe Interactive.

-- Bell Globemedia revenue was up 11% to $306 million in the first quarter. Advertising revenue was up 12% in the quarter to $221 million. Subscriber revenue was $65 million, up 10% from the first quarter of last year. Production revenue in the quarter reached $20 million, up 5% compared to the same period last year.

-- Television represented 74% of the total revenue while print and new media represented 22% and 4% respectively.

-- Cash operating expenses were $276 million compared with $248 million in the first quarter of 2000.

-- EBITDA was $30 million in the first quarter, up 7% compared with the same period last year.

TELEGLOBE (Global Connectivity)

Teleglobe represents the Teleglobe Communications group.

-- Teleglobe contributed revenue of $506 million to BCE in the quarter compared with $501 million in the first quarter of last year.

-- Data and hosting revenue reached $153 million, a 43% increase compared with the first quarter of 2000 and a 3% decrease over the previous quarter.

-- Voice revenue was $353 million, a 10% decrease compared with the first quarter of 2000 and 1% increase from the previous quarter.

-- Cash operating expenses of $477 million in the quarter were decreased by 2% compared to the first quarter of 2000.

-- EBITDA was $29 million in the first quarter compared with $10 million in the same period last year and flat at $28 million compared with the previous quarter.

-- Teleglobe completed a US$150M agreement with Telecom Italia for data, voice and hosting services in Latin America and Europe.

BCE EMERGIS (Commerce)

-- BCE Emergis' revenue reached $143 million in the quarter, up 96% compared with the same period in 2000 mainly due to the acquisition of BCE Emergis Corporation (formerly UP & UP) in March 2000.

-- EBITDA grew to $26 million at the end of the first quarter compared with $5 million for the same period in 2000.

-- BCE Emergis' revenue from its U.S. operations now represents 39% of total revenue compared with 8% in the first quarter of last year.

BCE VENTURES (Non-core Investments)

BCE Ventures includes the activities of BCI, CGI, Telesat, Excel and other investments.

-- BCE Ventures' revenue was $658 million in the quarter compared with $901 million in the same period of 2000. The decrease is primarily attributable to lower revenue at Excel.

-- EBITDA was $64 million in the quarter compared with $135 million in the first quarter of last year.

OTHER

Teleglobe Inc. reported statutory revenue of US $532 million in the first quarter. Statutory net loss applicable to common shares for the same period was US $1.4 billion and included an impairment charge of US $1.3 billion relative to its interest in the Excel Communications group.

BCE is Canada's largest communications company. It has more than 21 million customer connections through the wireline, wireless, data/Internet and satellite services it provides, largely under the Bell brand. BCE leverages those connections with extensive content creation capabilities through Bell Globemedia which features some of the strongest brands in the industry -- CTV, Canada's leading private broadcaster, The Globe and Mail, Canada's National Newspaper, and Sympatico-Lycos and Globe Interactive, leading Canadian Internet portals. As well, BCE has extensive e-commerce capabilities provided under the BCE Emergis brand and serves international customers through Teleglobe, a global connectivity, content distribution and Internet hosting company. BCE shares are listed in Canada, the United States and Europe.

Supplementary financial information is available in the "Investors" section of BCE's Web site at www.bce.ca.

BCE's first quarter 2001 conference call with analysts is scheduled for 6:00 a.m. Pacific time (9:00 a.m. Eastern time) today. You may participate by phone, dial [phone] or via an audio webcast from our Internet site at www.bce.ca.

A replay of the conference call with analysts can be heard between 12:00 p.m.eastern time Wednesday, April 25 and 12:00 p.m. eastern time Wednesday, May 2. To access the replay facility, dial [phone] - access code: 677530. The audio webcast will also be archived over the same period on BCE's Web site.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS 

Certain statements made in this press release, including, but not limited to, the financial guidance and other information appearing under the "Outlook" section, are forward-looking and are subject to important risks and uncertainties. These statements do not reflect the potential impact of any mergers, acquisitions, other business combinations or divestitures that may be completed after the date hereof. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ materially from current expectations include, among other things: current negative trends in global market and economic conditions which impact the demand for, and costs of, products and services; changes in customer purchase patterns and, more specifically, the fact that the purchase of certain services provided by the BCE group of companies is more subject to be adversely affected by economic slowdowns; the financial condition of customers; uncertainty as to whether BCE's strategies (including its convergence strategy) will yield the expected benefits, synergies and growth prospects; the intensity of competitive activity and its resulting impact on the ability to retain existing, and attract new, customers, and the consequent impact on pricing strategies, revenues, new product offerings and network capacity; the ability to reduce operating costs; the level of expenditures necessary to expand operations, increase the number of subscribers, provide new services, update networks and maintain or improve quality of service, and the availability and cost of capital required to fund such expenditures; Teleglobe's GlobeSystem initiative requiring more capital than anticipated to complete, or not being completed in time, or GlobeSystem not providing the anticipated benefits, or insufficient financing being available to complete GlobeSystem; the ability to increase revenues from business segments other than voice services (such as data and Internet services) in order to offset declining revenues in the voice business segment; uncertainties related to the transformation of Teleglobe from a voice-driven global carrier to a global data and Internet provider; the failure by counterparties to renew contracts for the provision of network capacity; the uncertainties of the Internet including its impact on network capacity and the Internet economy growing at a slower pace than is currently anticipated; the level of adoption of e-commerce and BCE Emergis' ability to expand its operations in the United States; the impact of rapid technological and market change and the resulting potential technological obsolescence of current networks and equipment and the ability to deploy new technologies; the ability to make acquisitions and/or integrate the operations of acquired businesses in an effective manner; the impact of consolidations in the telecommunications and media industries; stock market volatility; the availability of, and ability to retain, key personnel; the impact of adverse changes in laws or regulations or of adverse regulatory initiatives or proceedings; and the final outcome of pending or future litigation.

For additional information with respect to certain of these and other factors, see the reports on Forms 6-K and 40-F filed by BCE with the U.S. Securities and Exchange Commission and BCE's filings with the Canadian securities commissions. The forward-looking statements contained in this press release represent BCE's expectations as of April 25, 2001 and, accordingly, are subject to change after such date. However, BCE disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Consolidated Statements of Operations (unaudited)

                         ($ millions, except per share amounts)
For the three months ended March 31           2001         2000
---------------------------------------------------------------
Operating revenues                           5,506        3,977
Operating expenses                         (4,868)      (3,144)
Restructuring and other charges (Note 2)     (239)            -
                                         ---------   ----------
Operating income                               399          833
Gains on reduction of ownership in
 subsidiary and significantly
 influenced companies                           64            -
Equity in net losses of significantly
 influenced companies                          (3)         (12)
Other income (Note 3)                        3,718           12
Impairment charge (Note 4)                 (2,049)            -
                                         ---------   ----------
Earnings from continuing operations
 before the under-noted items                2,129          833
                                         ---------   ----------
Interest expense - long-term debt            (292)        (206)
                 - other debt                 (87)         (65)
                                         ---------   ----------
Total interest expense                       (379)        (271)
                                         ---------   ----------
Earnings from continuing operations
 before income taxes
and non-controlling interest                 1,750          562
Income taxes                                 (998)        (322)
Non-controlling interest                      (55)         (64)
                                         ---------   ----------
Earnings from continuing operations            697          176
Discontinued operations (Note 5)               283        3,996
                                         ---------   ----------
Net earnings                                   980        4,172
Dividends on preferred shares                 (18)         (23)
                                         ---------   ----------
Net earnings applicable to common shares       962        4,149
---------------------------------------------------------------
Net earnings per common share - basic

  Continuing operations                       0.84         0.24
  Discontinued operations                     0.35         6.20
  Net earnings                                1.19         6.44
Net earnings per common share
 - diluted (Note 6)
  Continuing operations                       0.83         0.23
  Discontinued operations                     0.34         6.13
  Net earnings                                1.17         6.36
Dividends per common share                    0.30         0.34
Average number of common shares
 outstanding (millions)                      808.1        644.0

---------------------------------------------------------------

Consolidated Statements of Retained Earnings (unaudited)

                                                   ($ millions)
For the three months ended March 31           2001         2000
---------------------------------------------------------------
Balance at beginning of period               1,521        7,894
Net earnings                                   980        4,172
                                         ---------   ----------
                                             2,501       12,066
                                         ---------   ----------
Dividends - Preferred shares                  (18)         (23)
          - Common shares                    (242)        (219)
                                         ---------   ----------
                                             (260)        (242)
Premium on redemption of common shares
 (Note 10)                                   (108)            -
Other                                         (15)          (2)
                                         ---------   ----------
                                             (383)        (244)
                                         ---------   ----------
Balance at end of period                     2,118       11,822
---------------------------------------------------------------


Consolidated Balance Sheets (unaudited)

                                                   ($ millions)
                                          March 31  December 31
                                              2001         2000
---------------------------------------------------------------
ASSETS
Current assets
  Cash and cash equivalents                  2,898          260
  Accounts receivable                        4,667        4,344
  Other current assets                       1,255        2,096
                                         ---------   ----------
Total current assets                         8,820        6,700
Investments in significantly influenced
 and other companies                         1,012        1,648
Capital assets                              23,545       22,301
Future income taxes                            809        1,117
Deferred charges and other assets            3,241        3,313
Goodwill                                    15,881       16,304
                                         ---------   ----------
Total assets                                53,308       51,383
---------------------------------------------------------------
LIABILITIES
Current liabilities
  Accounts payable and accrued liabilities   4,854        5,486
  Income and other taxes payable               544          144
  Debt due within one year                   4,228        5,884
                                         ---------   ----------
Total current liabilities                    9,626       11,514
Long-term debt                              14,991       14,044
Future income taxes                          1,011          715
Other long-term liabilities                  3,917        3,885
-------------------------------------    ---------   ----------
Total liabilities                           29,545       30,158
-------------------------------------    ---------   ----------
Non-controlling interest                     5,318        3,764
-------------------------------------    ---------   ----------
SHAREHOLDERS' EQUITY
Preferred shares                             1,300        1,300
Common shareholders' equity
  Common shares (1)                         13,804       13,833
  Contributed surplus (Note 10)                980          985
  Retained earnings                          2,118        1,521
  Currency translation adjustment              243        (178)
                                         ---------   ----------
Total common shareholders' equity           17,145       16,161
-------------------------------------    ---------   ----------
Total shareholders' equity                  18,445       17,461
-------------------------------------    ---------   ----------
Total liabilities and
 shareholders' equity                       53,308       51,383
---------------------------------------------------------------

1) At March 31, 2001, 807,294,921 (809,861,531 at December 31, 2000) BCE Inc. common shares and 18,406,891 (9,114,695 at December 31, 2000) BCE Inc. stock options were outstanding. The stock options were issued under BCE's Long-Term Incentive Stock Option Programs and are exercisable on a one-for-one basis for common shares of BCE Inc. Additionally, as a result of the acquisition of Teleglobe Inc. on November 1, 2000, Teleglobe Inc. stock option holders will receive, upon exercise of their stock options, 0.91 of a BCE Inc. common share for each Teleglobe Inc. stock option held. At March 31, 2001, the Telegobe Inc. stock options outstanding were exercisable into 14,473,520 BCE Inc. common shares (18,934,537 at December 31, 2000).

Consolidated Statements of Cash Flows (unaudited)

                                                   ($ millions)
For the three months ended March 31           2001         2000
---------------------------------------------------------------
Cash flows from operating activities
 Earnings from continuing operations           697          176
 Adjustments to reconcile earnings from
  continuing operations to
 cash flows from operating activities:
  Depreciation and amortization              1,156          799
  Restructuring and other charges              231            -
  Gains on reduction of ownership in
   subsidiary and significantly
   influenced companies                       (64)            -
  Impairment charge                          2,049            -
  Net gains on disposal of investments     (3,756)         (16)
  Future income taxes                          351          (3)
  Dividends received in excess of equity in
   net losses of significantly influenced
   companies                                    10           24
  Other items                                  310        (121)
  Change in non-cash working capital
   components                                   53        (592)
                                         ---------   ----------
                                             1,037          267
-------------------------------------    ---------   ----------
Cash flows from investing activities
 Capital expenditures                      (1,996)        (571)
 Investments                                 (649)      (1,261)
 Divestitures                                4,608            -
 Other items                                  (45)           53
                                         ---------   ----------
                                             1,918      (1,779)
-------------------------------------    ---------   ----------
Cash flows from financing activities
 Dividends paid on common and
  preferred shares                           (260)        (242)
 Dividends paid by subsidiaries to
  non-controlling interest                    (81)        (100)
 Increase (decrease) of notes payable
  and bank advances                        (1,691)        1,683
 Issue of long-term debt                       843          232
 Repayment of long-term debt                 (346)        (150)
 Redemption of preferred shares by
  subsidiaries                               (136)        (295)
 Issue of common shares                         47           14
 Purchase of common shares for cancellation  (191)            -
 Issue of common shares, preferred shares,
  convertible debentures and equity-settled
  notes by subsidiaries to non-controlling
  interest                                     777          434
 Other items                                     2            2
                                         ---------   ----------
                                           (1,036)        1,578
-------------------------------------    ---------   ----------
Effect of exchange rate changes on
 cash and cash equivalents                      38           25
-------------------------------------    ---------   ----------
Cash provided by continuing operations       1,957           91
Cash provided by (used in) discontinued        681         (76)
                                         ---------   ----------
Net increase in cash and cash equivalents    2,638           15
Cash and cash equivalents at
 beginning of period                           260        2,395
                                         ---------   ----------
Cash and cash equivalents at end of period   2,898        2,410
---------------------------------------------------------------

Segmented Information (unaudited)

                                                   ($ millions)
For the three months ended March 31           2001         2000
---------------------------------------------------------------
Operating revenues
Bell Canada                                  4,107        3,686
Bell Globemedia                                306            2
Teleglobe                                      506            -
BCE Emergis                                    143           73
Corporate and other, including intercompany
 eliminations                                (163)        (128)
                                         ---------   ----------
Total core operating revenues                4,899        3,633
BCE Ventures                                   658          369
Intercompany eliminations                     (51)         (25)
                                         ---------   ----------
Total operating revenues                     5,506        3,977
---------------------------------------------------------------
Earnings from continuing operations
Bell Canada                                    195          230
Bell Globemedia                               (33)            -
Teleglobe                                    (116)          (6)
BCE Emergis                                   (91)         (28)
Corporate and other, including intercompany
 eliminations                                2,882           54
                                         ---------   ----------
Total core earnings from continuing
 operations                                  2,837          250
BCE Ventures                               (2,143)         (70)
Intercompany eliminations                        3          (4)
                                         ---------   ----------

Total earnings from continuing operations      697          176
---------------------------------------------------------------

Notes to the Consolidated Financial Statements (unaudited) These interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2000, as set out on pages 36 to 60 of BCE Inc.'s (BCE) 2000 Annual Report.

Note 1. Significant accounting policies

These interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles, using the same accounting policies as outlined in Note 1 of the consolidated financial statements for the year ended December 31, 2000, except as noted below. All amounts are in Canadian dollars, except where otherwise noted. Certain comparative figures in these consolidated financial statements have been reclassified to conform to the current period presentation.

Effective January 1, 2001, BCE adopted the revised recommendations of the Canadian Institute of Chartered Accountants (CICA) Handbook section 3500, Earnings Per Share (EPS). The revised Handbook section requires the presentation of both basic and diluted EPS on the face of the income statement regardless of the materiality of the difference between them. In addition, the treasury stock method is used to compute the dilutive effect of options, warrants and similar instruments as opposed to the previously used imputed earnings approach. The section also requires that a reconciliation of the calculation of the basic and diluted earnings per common share computations be disclosed.

In the first quarter of 2001, BCE also adopted the new recommendations of the CICA Handbook section 1751, Interim Financial Statements, which changes the requirements for the presentation and disclosure of interim financial statements and the accompanying notes.

Note 2. Restructuring and other charges

During the first quarter of 2001, Bell Canada recorded a pre-tax charge of $239 million ($143 million after tax) representing restructuring and other charges of $210 million and $29 million respectively. The restructuring charge is related to employee severance, including enhanced pension benefits and other directly related employee costs for approximately 1,900 employees, which resulted from a decision to streamline support functions. The restructuring program is expected to be substantially completed by mid 2001. Other charges relate mainly to the write-off of certain assets.

Note 3. Other income

Sale of Nortel Networks Corporation (Nortel Networks) Shares and Settlement of Forward Contracts In March 2001, BCE recorded a gain of approximately $3.7 billion relating to the settlement of short-term forward contracts on approximately 47.9 million Nortel Networks common shares as well as the sale of an equivalent number of Nortel Networks common shares. These transactions resulted in total proceeds of approximately $4.4 billion, of which $2.6 billion was used to repay short-term debt. The remaining proceeds will be used to continue funding the company's growth strategy.

BCE continues to hold approximately 12 million Nortel Networks common shares of which six million have been reserved to hedge BCE's exposure to special compensation payments, relating to Nortel Network common shares, which were granted to employees under the company's stock option plans prior to 2000.

Note 4. Impairment charge

In March 2001, after completion of an assessment of the carrying value of BCE's investment in the Excel Communications group (Excel), an impairment charge of $2,049 million was recorded. The assets of Excel were written down to their estimated net recoverable amount, which was determined using the undiscounted net future cash flows to be generated by these assets. The primary factor contributing to the impairment is a lower than expected operating profit due to a reduction in Excel's forecasted minute volumes and average revenue per minute which are expected to continue in the foreseeable future. As a result of this impairment charge, goodwill was reduced by $1,621 million and capital and other assets were reduced by $428 million.

Note 5. Discontinued operations 

For the three months ended March 31
 ($ millions)                                 2001         2000
---------------------------------------------------------------
Bell Canada International (BCI)
 Latin American CLEC and Asia Mobile segments  283         (53)
Nortel Networks                                  -        4,055
ORBCOMM Global, L.P.                             -          (6)
                                         ---------   ----------
Total Discontinued operations                  283        3,996
---------------------------------------------------------------

Effective February 23, 2001, BCI sold its 20% equity interest in KG Telecommunications Co. Ltd. (KG Telecom) for an aggregate cash consideration of approximately $785 million. KG Telecom represented BCI's last remaining operation in its Asia Mobile business segment. Additionally, effective March 31,2001, BCI adopted a formal plan of disposal for all of its operations in its Latin American Competitive Local Exchange Carriers (CLECs) business segment, composed of Axtel S.A. de C.V., Vesper S.A., Vesper Sao Paulo S.A. and Vento S.A. Ltda. Consequently, the results of these segments have been reported as discontinued operations.

The summarized balance sheets for the discontinued operations are as follows:

---------------------------------------------------------------
At March 31 ($ millions)                      2001         2000
---------------------------------------------------------------
Current assets                                 116          321
Non-current assets                             908        1,403
Current liabilities                          (144)        (529)
Non-current liabilities                      (729)        (540)
                                         ---------   ----------
Net assets of discontinued operations          151          655
---------------------------------------------------------------

      The summarized statements of operations for the discontinued
operations are as follows:

For the three months ended March 31
 ($ millions)                                 2001         2000
---------------------------------------------------------------
Revenue                                         53          123
-------------------------------------    ---------   ----------
Operating earnings from discontinued
 operations, net of tax                      (118)        3,976
Gain on sale of discontinued operations,
 net of tax                                    502            -
Non-controlling interest                     (101)           20
                                         ---------   ----------
Net earnings from discontinued operations      283        3,996
---------------------------------------------------------------

Note 6. Earnings per share

      The following is a reconciliation of the numerators and the
denominators of the basic and diluted earnings per common share
computations for earnings from continuing operations:

---------------------------------------------------------------
For the three months ended March 31           2001         2000
---------------------------------------------------------------
Earnings from continuing operations
 (numerator)
Earnings from continuing operations            697          176
Dividends on preferred shares                 (18)         (23)
                                         ---------   ----------
Earnings from continuing operations
 - basic                                       679          153
Exercise of put options by CGI
 shareholders                                  (4)          (4)
                                         ---------   ----------
Earnings from continuing operations
 - diluted                                     675          149
---------------------------------------------------------------
Weighted average number of common
 shares outstanding (denominator) (millions)
Weighted average number of common
 shares outstanding - basic                  808.1        644.0
Exercise of stock options                      3.5          3.5

Exercise of put options by CGI shareholders    4.6          3.8
                                         ---------   ----------
Weighted average number of common shares
 outstanding -  diluted                      816.2        651.3
---------------------------------------------------------------

Note 7. Teleglobe Inc. acquisition

During the quarter the purchase price allocation relating to the BCE acquisition of Teleglobe Inc. on November 1, 2000 was finalized. The final allocation of the purchase price was to tangible assets for $3.6 billion, tangible liabilities for $4.4 billion and goodwill for $8.1 billion. As a result of the finalization of the purchase price allocation and the finalization of the fiscal 2000 year-end financial statements of Teleglobe Inc., BCE recorded a charge of $60 million relating to its share of asset write-downs and one-time charges recorded by Teleglobe Inc. in the fourth quarter of 2000.

Note 8. Creation of Bell Globemedia Inc.

On January 9, 2001, Bell Globemedia Inc. (Bell Globemedia) a Canadian multi-media company in the fields of broadcasting, print and new media, was created. BCE owns 70.1% of Bell Globemedia which includes CTV Inc. (CTV), The Globe and Mail, Globe Interactive and Sympatico-Lycos Inc. (Sympatico-Lycos). BCE transferred its interests in CTV, Sympatico-Lycos and other miscellaneous media interests to Bell Globemedia. This transaction was accounted for at fair value resulting in the recognition of a $33 million gain on reduction of ownership in subsidiary companies. The acquisition of The Globe and Mail and Globe Interactive was accounted for using the purchase method. The allocation of the purchase price was to tangible assets for $172 million, tangible liabilities for $63 million and goodwill for $668 million. Goodwill is being amortized on a straight-line basis over 20 years.

Note 9. Business acquisitions

Acquisition of additional interest in Algar Telecom Leste S.A (ATL)

On March 27, 2001, Telecom Americas Ltd. (Telecom Americas), a joint venture of BCI (BCI holds a 44.3% interest in Telecom Americas), invested $470 million (US $300 million) in ATL, increasing Telecom Americas' ownership from 50% to 59% and began consolidating ATL's results

Acquisition of additional economic interest in Americel S.A. (Americel) and Telet S.A. (Telet )

On March 30, 2001, Telecom Americas closed the transaction to purchase an additional interest in the Brazilian cellular companies Telet S.A. and Americel S.A. This agreement represents one of the agreements announced on March 13, 2001, which will collectively result in the acquisition of an approximate additional 65% economic interest in Telet and Americel (increasing Telecom Americas' economic interest to approximately 81% in both companies) for an aggregate purchase price of approximately US $580 million. The remaining agreement is subject to lender and regulatory approvals, and is expected to close by the end of the second quarter of 2001.

Note 10. Normal course issuer bid

Under its Normal Course Issuer Bid program, during the first quarter of 2001, BCE purchased and cancelled approximately 4.5 million of its common shares for an aggregate price of $191 million, of which $108 million was charged to retained earnings as a premium on redemption of common shares and $5 million was charged to contributed surplus. BCE may purchase from time to time, no later than November 9, 2001, an additional 26.3 million of its common shares at market prices.

Note 11. Subsequent event

Acquisition of Tess S.A.

On April 9, 2001, Telecom Americas closed the transaction to purchase a substantial equity interest in Tess S.A. (Tess), a Sao Paulo State, Brazil, cellular company, through an investment of US $950 million. A majority of the voting rights will continue to be held by the sellers, in accordance with regulation governing ownership of B-Band licenses. Subsequently, on April 10, 2001, Telecom Americas announced that it had granted a call option to Bell South International Inc. (Bell South), to purchase 50% of Telecom Americas stake in Tess. The exercise of the option is subject to a number of restrictions, including legal and other customary approvals. Bell South has six months to exercise its option to purchase the stake in Tess.