BCE Announces Third Quarter Results; Revenue up 6% - EBITDA up 7% - Cash baseline earnings up 11%.

Business Editors

MONTREAL--(BUSINESS WIRE)--Oct. 24, 2001

BCE reported cash baseline earnings of $322 million, $0.40 per common share, in the third quarter ended September 30, 2001, an 11% increase compared with proforma (see note 1) cash baseline earnings for the same quarter last year. Total revenue was $5.4 billion, a 6% increase over proforma revenue last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.9 billion, up 7% compared with proforma EBITDA for the third quarter of 2000.

"BCE's results show solid growth in our key business drivers, despite a continued softening of the economy," said Jean C. Monty, Chairman and Chief Executive Officer of BCE Inc. "By remaining committed to the execution of our plans, we delivered good performance both from a total company perspective and from core operations."

      Operational Highlights (Q3 2001 vs Q3 2000 unless indicated)

      --  High Speed Internet (DSL) subscribers grew 18% over last
        quarter to 625,000;

      --  Bell Canada's data revenue was up 17% to $881 million;

      --  Cellular and PCS subscribers grew 25% to 3.2 million;

      --  Bell ExpressVu subscribers grew 57% to 930,000;

      --  Bell Globemedia revenue was $246 million;

      --  Teleglobe's EBITDA reached $38 million;

      --  BCE Emergis revenue grew 29% to $173 million.

"Bell Canada made strong gains in the quarter by significantly increasing its subscriber base in wireless, High Speed Internet and satellite T.V.," commented Mr. Monty. "BCE Emergis was particularly successful in its penetration of the U.S. market, signing significant agreements with key players from the financial and health sectors. Bell Globemedia strengthened its national reach through its interest in TQS, a Quebec-based television network. And as Teleglobe continues to build out its network, it is beginning to see the economic benefits of serving clients from its own network facilities."

"BCE also unveiled, as part of its convergence strategy, a series of value-added products that leverage BCE's connectivity, commerce and content capabilities. This first series of convergence products, which will be launched through the remainder of the year, will give our customers more choice, more control and more tools to personalize their information and entertainment services and e-enable their businesses."

After baseline adjustments of $468 million, the net loss applicable to common shares was $146 million in the quarter. Third quarter baseline adjustments consisted mainly of losses at Bell Canada International, goodwill expense and restructuring and other charges at Teleglobe.

OUTLOOK

BCE's financial guidance provided in February has been adjusted to reflect the reclassification of Excel Communications as a discontinued operation, following the announcement, in the third quarter, of an agreement to sell Excel to VarTec. The accounting rules for discontinued operations require the exclusion of Excel's operations from BCE's consolidated results from continuing operations for all prior reporting periods as well as prospectively. As a result the revenue range of BCE's guidance is reduced by approximately $1.5 billion, which corresponds to Excel's planned 2001 contribution to BCE's revenue, to an adjusted range of $21.5 to $23.5 billion. This change has no material impact on the EBITDA guidance range of $7.5 to $8.0 billion and cash baseline earnings per share range of $1.57 to $1.62. BCE's management continues to believe it is on track to meet the lower end of this guidance.

RESULTS BY OPERATING GROUP (unaudited)

BCE's core activities include: Bell Canada (Canadian connectivity), Bell Globemedia (content), Teleglobe (global connectivity) and BCE Emergis (commerce). BCE Ventures consists of other BCE investments.

                    (C$ in millions, except per share amounts)
                    -------------------------------------------
                         Third Quarter         Nine Months
For the period
ended September 30th     2001      2000(1)   2001      2000(1)
---------------------------------------------------------------
Revenue
Bell Canada              4,337     4,063    12,692    11,624
Bell Globemedia            246       251       849       823
Teleglobe                  491       518     1,539     1,507
BCE Emergis                173       134       475       327
BCE Ventures               412       337     1,172     1,071
Corporate, Intercompany
 eliminations,
 and Other               (280)     (214)     (764)     (659)
                         -----     -----    ------    ------
Total revenue            5,379     5,089    15,963    14,693
---------------------------------------------------------------

Cash baseline earnings(2)
Bell Canada                310       318       888       829
Bell Globemedia           (16)      (13)       (7)       (6)
Teleglobe(3)              (14)      (42)      (63)     (137)
BCE Emergis                 12         3        29         6
BCE Ventures(3)            (4)        13        11        33
Corporate, Intercompany
 eliminations,
 and Other                  34        11        91        23
                         -----     -----     -----     -----
Cash baseline earnings
 applicable to
 common shares             322       290       949       748
Cash baseline earnings
 per common               0.40      0.36      1.17      0.92
 share
---------------------------------------------------------------

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

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

(3) In 2001, cash baseline earnings of Teleglobe consist of the results of the Teleglobe Communications group. In 2000, however, cash baseline earnings also included Teleglobe Marine's results and interest expense on Excel's debt that will not be assumed by the purchaser, which in 2001, are presented in BCE Ventures.

THIRD QUARTER REVIEW (Q3 2001 vs Q3 2000, unless indicated)

BELL CANADA (Canadian Connectivity)

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

      --  Revenue in the third quarter was up 7% to $4.3 billion due
        mainly to strong growth in data operations, local and access
        services, wireless services and Bell ExpressVu. Local and
        access services revenues were up 7% at $1.6 billion. Long
        distance services revenue decreased by 10% to $663 million
        mainly due to lower rates. Data revenue increased 17% to $881
        million.

      --  DSL High Speed Internet net activations reached 96,000 in the
        third quarter compared with 81,000 for the same period in
        2000.

      --  Wireless revenue was up 21% to $490 million due primarily to
        strong growth in cellular and PCS subscribers. There were
        151,000 net additions in the quarter. Bell continued to
        maintain its industry leading churn reflecting its commitment
        to and focus on customer service and innovation.

      --  Bell ExpressVu had revenue of $117 million in the quarter, a
        44% increase compared with the same period last year.
        Subscribers increased by 83,000 over the previous quarter to
        reach 930,000. Subscriber activations in urban areas accounted
        for 70% of total new activations in the quarter compared with
        65% in the previous quarter.

      --  Bell Canada's EBITDA grew 4% in the third quarter to $1.8
        billion. Excluding Bell ExpressVu, EBITDA was $1.9 billion, a
        5% increase compared with the third quarter of 2000.

BELL GLOBEMEDIA (Content)

Bell Globemedia includes CTV, The Globe and Mail and Bell Globemedia Interactive.

      --  Bell Globemedia revenue was $246 million in the quarter
        compared with proforma revenue of $251 million for the same
        period last year. Advertising revenue decreased by 3% to $163
        million, mostly attributable to lower revenue in print as a
        result of a softening of the economy. Subscriber revenue was
        up 5% to $64 million.

      --  Television represented 75% of the total revenue, print 19% and
        Interactive 6%. The Interactive segment continued to expand,
        gaining a 2-percentage point compared with the previous
        quarter.

      --  EBITDA was $(6) million in the third quarter compared with
        $(4) million for the same period last year.

      --  Bell Globemedia launched its first convergence product:
        TSNMAX.ca.

TELEGLOBE (Global Connectivity)

Teleglobe refers to the Teleglobe Communications group.

      --  Teleglobe contributed revenue of $491 million to BCE compared
        with $518 million in the third quarter of last year and $542
        million in the previous quarter. Both data and voice revenues
        were lower as a result of adverse market conditions.

      --  Data and hosting revenue was $139 million compared with $145
        million in the third quarter of 2000 and $168 million in the
        previous quarter.

      --  Voice revenue was $352 million compared with $373 million in
        the third quarter of 2000 and $374 million in the previous
        quarter.

      --  EBITDA doubled over the third quarter of 2000 to $38 million
        and was up 58% compared with the previous quarter. The
        increase in EBITDA is mainly attributable to the stabilization
        of voice margins and the significant savings achieved in the
        quarter due to network migration and cost control initiatives.

      --  In the third quarter, Teleglobe continued its GlobeSystem
        network deployment increasing fibre capacity by 86% compared
        with the second quarter of 2001.

BCE EMERGIS (Commerce)

      --  BCE Emergis' revenue reached $173 million in the quarter, up
        29% compared with the same period in 2000 with all three
        business units - Canadian, U.S. and eHealth Solutions units -
        achieving strong results.

      --  EBITDA was $35 million in the quarter, up 35% compared with
        the third quarter of 2000.

      --  BCE Emergis announced a series of significant agreements with
        key U.S. and Canadian partners including The Principal
        Financial Group, Canada Life and Bell Canada.

      --  In the quarter, 43% of BCE Emergis' total revenue originated
        from its U.S. operations.

BCE VENTURES (Non-core Investments)

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

      --  BCE Ventures' revenue was $412 million in the quarter, up 22%
        compared with the same period of 2000.

      --  EBITDA was $100 million in the quarter compared with $50
        million in the third quarter of 2000.

Following the announcement of the sale of Excel's North American operations, subject to regulatory and other approvals, and the discontinuation of its U.K. operations, BCE reclassified the results of Excel as discontinued operations. Excel's results are therefore excluded from BCE Ventures' revenue, EBITDA and cash baseline earnings.

OTHER

Bell Canada reported statutory revenue of $3.6 billion in the third quarter compared with $3.4 billion in the same quarter of 2000. Statutory net earnings applicable to common shares were $440 million in the quarter compared with $293 million for the same period last year.

Teleglobe Inc. reported statutory revenue of US $311 million in the third quarter compared with US $330 million in the third quarter of 2000. Statutory net loss applicable to common shares was US $303 million in the quarter compared with US $367 million for the same period in 2000.

BCE is Canada's largest communications company. It has close to 23 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, the leading Canadian Internet portal. 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 third quarter 2001 conference call with analysts is scheduled for 8:30 a.m. Eastern time today. You may participate by phone, dial [phone] or via an audio webcast from our Web site at www.bce.ca.

A replay of the conference call with analysts can be heard between 12:00 p.m. Eastern time Wednesday, October 24 and 12:00 p.m. Eastern time Wednesday, October 31. To access the replay facility, dial [phone] - access code: 866380. 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 appearing under the "Outlook" section, are forward-looking and are subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. These statements do not reflect the potential impact of any mergers, acquisitions, other business combinations or divestitures that may be announced or completed after the date hereof. Other 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 purchasing 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 and credit risk of customers; uncertainties regarding collectibility of receivables; 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, build and update networks and maintain or improve quality of service, and the availability and cost of capital required to fund such expenditures; unanticipated higher capital spending for, or delays in deployment of, new technologies and initiatives; Teleglobe's GlobeSystem initiative requiring more capital than anticipated to complete, or not being completed on schedule, 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); uncertainties related to the transformation of Teleglobe from a voice-driven global carrier to a global data and Internet provider; loss of network capacity or other interruption in service resulting from the failure by key suppliers to continue to provide to Teleglobe 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; the impact of the CRTC's decision concerning the review of the price caps regime for local services expected early in 2002; the final outcome of pending or future litigation; and the risk that the transaction for the sale of the North American operations of Excel to VarTec Telecom will not close.

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 October 24, 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.

For further information: Jean-Charles Robillard  Isabelle Morin Communications Investor Relations [phone] [phone] Web site: www.bce.ca

                               BCE Inc.
                             Consolidated
                         Financial Statements

                          Third Quarter 2001

Consolidated Statements of Operations (unaudited)

                        ($ millions, except per share amounts)
                          Three months            Nine months
For the period
ended September 30       2001      2000      2001         2000
---------------------------------------------------------------
Operating revenues       5,379     4,386    15,963       12,562
Operating expenses     (4,586)   (3,456)  (13,799)      (9,972)
Restructuring and
other charges (Note 2)   (130)         -     (369)            -
                        ------    ------    ------       ------
Operating income           663       930     1,795        2,590
Gains on reduction of
 ownership in subsidiaries
 and joint
 ventures (Note 3)         188         -       266            -
Equity in net losses
of significantly
influenced companies       (7)     (107)      (11)        (153)
Other income (expense)
(Note 4)                 (236)     (108)     3,526        (126)
                        ------    ------    ------       ------
Earnings from continuing
operations before
the under-noted items      608       715     5,576        2,311
                        ------    ------    ------       ------
Interest expense
- long-term debt         (303)     (224)     (896)        (679)
- other debt              (91)      (96)     (265)        (232)
                        ------    ------    ------       ------
Total interest expense   (394)     (320)   (1,161)        (911)
                        ------    ------    ------       ------
Earnings from continuing
operations before
income taxes and
non-controlling interest   214       395     4,415        1,400
Income taxes             (305)     (355)   (1,601)        (970)
Non-controlling interest    25      (30)      (83)        (140)
                        ------    ------    ------       ------
Earnings (loss) from
continuing operations     (66)        10     2,731          290
Discontinued operations
(Note 5)                  (64)       649   (1,896)        4,584
                        ------    ------    ------       ------
Net earnings (loss)      (130)       659       835        4,874
Dividends on preferred
shares                    (16)      (19)      (50)         (61)
                        ------    ------    ------       ------
Net earnings (loss)
applicable to common
shares                   (146)       640       785        4,813
---------------------------------------------------------------

Net earnings (loss)
per common share
- basic (Note 6)
Continuing operations   (0.10)    (0.01)      3.32         0.36
Net earnings (loss)     (0.18)      0.99      0.97         7.47
Net earnings (loss)
per common share
- diluted (Note 6)
Continuing operations   (0.10)    (0.02)      3.29         0.33
Net earnings (loss)     (0.18)      0.98      0.96         7.38
Dividends per common
share                     0.30      0.30      0.90         0.94
Average number of common
shares outstanding
(millions)               807.9     644.7     807.8        644.4
-----------------------------------------------------------------

Consolidated Statements of Retained Earnings (unaudited)

                                                   ($ millions)
                          Three months          Nine months
For the period
ended September 30        2001      2000      2001         2000
---------------------------------------------------------------

Balance at beginning
of period                1,847     1,554     1,521        7,894
Net earnings (loss)      (130)       659       835        4,874
                        ------    ------    ------       ------
                         1,717     2,213     2,356       12,768
Dividends
- Preferred shares        (16)      (19)      (50)         (61)
- Common shares          (243)     (194)     (727)        (606)
- Distribution
of Nortel Networks
common shares                -         -         -     (10,114)
                        ------    ------    ------     --------
                         (259)     (213)     (777)     (10,781)
Premium on redemption
of common
shares (Note 8)              -         -     (108)            -
Other                      (2)         6      (15)           19
                        ------    ------    ------      -------
                         (261)     (207)     (900)     (10,762)
                        ------    ------    ------      -------
Balance at end
of period                1,456     2,006     1,456        2,006
---------------------------------------------------------------

Consolidated Balance Sheets (unaudited)
                                                   ($ millions)
                                       September 30 December 31
                                             2001       2000
---------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents                    1,088       260
Accounts receivable                          4,758     4,344
Other current assets                         1,372     2,096
                                            ------    ------
Total current assets                         7,218     6,700
Investments in significantly influenced
and other companies                          1,181     1,648
Capital assets                              25,019    22,301
Future income taxes                            845     1,117
Deferred charges and other assets            3,630     3,313
Goodwill                                    16,115    16,304
                                            ------    ------
Total assets                                54,008    51,383
===============================================================
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities     5,669     5,486
Income and other taxes payable                 655       144
Debt due within one year                     4,525     5,884
                                            ------    ------
Total current liabilities                   10,849    11,514
Long-term debt                              15,199    14,044
Future income taxes                          1,187       715
Other long-term liabilities                  3,964     3,885
                                            ------    ------
Total liabilities                           31,199    30,158
                                            ------    ------
Non-controlling interest                     5,509     3,764
                                            ------    ------
SHAREHOLDERS' EQUITY
Preferred shares                             1,300     1,300
                                            ------    ------
Common shareholders' equity
Common shares (1)                           13,822    13,833
Contributed surplus (Note 8)                   980       985
Retained earnings                            1,456     1,521
Currency translation adjustment              (258)     (178)
                                            ------    ------
Total common shareholders' equity           16,000    16,161
                                            ------    ------
Total shareholders' equity                  17,300    17,461
                                            ------    ------
Total liabilities and shareholders' equity  54,008    51,383
===============================================================

(1) At September 30, 2001, 808,143,000 (809,861,531 at December 31, 2000) BCE Inc. common shares and 18,241,654 (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 September 30, 2001, the Teleglobe Inc. stock options outstanding were exercisable into 12,335,640BCE Inc. common shares (18,934,537 at December 31, 2000).

Consolidated Statements of Cash Flows (unaudited)

                                                  ($ millions)
                         Three months         Nine months
For the period ended
September 30             2001       2000     2001       2000
---------------------------------------------------------------
Cash flows from
operating activities
Earnings (loss) from
continuing operations     (66)        10     2,731       290
Adjustments to reconcile
earnings from continuing
operations to cash flows
from operating activities:
 Depreciation
 and amortization        1,206       934     3,590     2,643
 Restructuring
 and other charges         111         -       314         -
 Gains on reduction of
 ownership in subsidiaries
 and joint ventures      (188)     1,113     (266)     1,113
 Net gains on disposal
 of investments            139   (1,012)   (3,637)   (1,035)
 Future income taxes        38      (55)       373      (50)
 Dividends received in
 excess of equity in net
 losses of significantly
 influenced companies        5        85        18       152
 Other items                19       (1)     (370)     (365)
 Change in non-cash
working capital
components               (146)      (87)     (285)     (855)
                        ------    ------    ------    ------
                         1,118       987     2,468     1,893
--------------------    ------    ------    ------    ------
Cash flows from
investing activities
 Capital expenditures  (1,408)     (969)   (5,088)   (2,511)
 Investments             (489)     (539)     (997)   (4,415)
 Divestitures               14       399     4,820       467
 Other items             (118)        37       342        60
                        ------    ------    ------    ------
                       (2,001)   (1,072)     (923)   (6,399)
--------------------    ------    ------    ------    ------
Cash flows from
 financing activities
 Dividends paid on common
 and preferred shares    (259)     (213)     (777)     (667)
 Dividends paid by
 subsidiaries
 to non-controlling
 interest                (128)      (83)     (293)     (263)
 Increase (decrease)
 of notes payable
 and bank advances         197     (268)   (1,871)     1,945
 Issue of long-term debt   868       456     2,246     1,495
 Repayment
 of long-term debt       (415)     (559)   (1,377)   (1,072)
 Redemption of preferred
 shares by subsidiaries  (125)         -     (471)     (295)
 Issue of common shares     10         -        66        31
 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                   3        83     1,371       674
Other items               (27)        12         7        64
                        ------    ------    ------    ------
                           124     (572)   (1,290)     1,912
----------------------- ------    ------    ------    ------
Effect of exchange rate
 changes on cash and
 cash equivalents         (47)      (30)       (6)      (13)
----------------------- ------    ------    ------    ------
Cash (used in) provided
by continuing operations (806)     (687)       249   (2,607)
Cash provided by
discontinued operations    101       861       579       720
                        ------    ------    ------    ------
Net (decrease) increase
in cash and cash
equivalents              (705)       174       828   (1,887)
Cash and cash
equivalents at beginning
of period                1,793       334       260     2,395
                        ------    ------    ------    ------
Cash and cash equivalents
at end of period         1,088       508     1,088       508
===============================================================

Segmented Information (unaudited)
                                                  ($ millions)
                         Three months        Nine months
For the period ended
September 30             2001      2000      2001      2000
---------------------------------------------------------------
Operating revenues
Bell Canada              4,337     4,063    12,692    11,624
Bell Globemedia            246         6       849        13
Teleglobe                  491         -     1,539         -
BCE Emergis                173       134       475       327
Corporate and other,
including intercompany
eliminations             (160)     (123)     (512)     (365)
                        ------    ------    ------    ------
Total core
operating revenues       5,087     4,080    15,043    11,599
BCE Ventures               412       326     1,172     1,044
Intercompany
eliminations             (120)      (20)     (252)      (81)
                        ------    ------    ------    ------
Total operating revenues 5,379     4,386    15,963    12,562
===============================================================
Earnings (loss) from
continuing operations
Bell Canada                298       301       789       790
Bell Globemedia           (52)      (42)     (125)      (62)
Teleglobe                (186)      (39)     (449)      (55)
BCE Emergis               (70)      (63)     (236)     (145)
Corporate and other,
including intercompany
eliminations                51        31     3,006       116
                        ------    ------    ------    ------
Total core earnings from
continuing operations       41       188     2,985       644
BCE Ventures             (106)     (178)     (257)     (348)
Intercompany
eliminations               (1)         -         3       (6)
                        ------   -------   -------    ------
Total earnings (loss)
from continuing
operations                (66)        10     2,731       290
===============================================================

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

The 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 indicated. Certain comparative figures in the 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 EPS computations be disclosed. In 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. The CICA recently issued new Handbook Sections 1581, Business Combinations, and 3062, Goodwill and Other Intangible Assets. Effective July 1, 2001, the standards require that all business combinations be accounted for using the purchase method. Additionally, effective January 1, 2002, goodwill and intangible assets with an indefinite life will no longer be amortized to earnings and will be assessed for impairment on an annual basis in accordance with the new standards, including a transitional impairment test whereby any resulting impairment will be charged to opening retained earnings. BCE is currently evaluating the impact of the adoption of the new standards and therefore has not yet assessed their effect on BCE's financial statements.

Note 2. Restructuring and other charges

Teleglobe announced a pre-tax charge of $139 million ($87 million after tax) in August 2001, of which $130 million was recorded in the third quarter, representing restructuring and other charges related to the closing of certain facilities and network costs as well as employee severance and other related employee costs, for approximately 450 employees, which resulted primarily from a decision to restructure portions of its business due to changing international market conditions. The restructuring program is expected to be substantially completed by the fourth quarter of 2001. As at September 30, 2001, the remaining unpaid balance of the restructuring provision was $122 million.

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 primarily from a decision to streamline support functions. The restructuring program is expected to be substantially completed by the fourth quarter of 2001. As at September 30, 2001, the remaining unpaid balance of the restructuring provision relating to employee severance and other directly related employee costs was $52 million. Other charges relate mainly to the write-off of certain assets.

Note 3. Gains on reduction of ownership in subsidiaries and joint ventures

In July 2001, BCE recognized a gain of $132 million on the reduction of its ownership in CGI Inc. (CGI) from 41% to 33% as a result of CGI's issuance of shares to IMRglobal Corp. shareholders in exchange for all of IMRglobal's common shares.

Note 4. Other income (expense)

In September 2001, Bell Canada International Inc. (BCI) provided for a $149 million (US $94 million) loss relating to a put option that may potentially require BCI to repurchase a third party's indirect stake in Comunicacion Celular S.A. Comcel S.A. (Comcel).

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 Corporation 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 are being used to continue funding the company's growth strategy.

Note 5. Discontinued operations
---------------------------------------------------------------
                         Three months          Nine months
For the period
ended September 30
($ millions)               2001     2000     2001       2000
---------------------------------------------------------------
Excel Communications
group (Excel)                -       (3)   (2,115)      (13)
BCI Latin American CLECs
and Asia Mobile segments  (64)       719       219       622
Nortel Networks              -         -         -     4,055
ORBCOMM Global, L.P.         -      (67)         -      (80)
                        ------    ------    ------    ------
Discontinued operations   (64)       649   (1,896)     4,584
---------------------------------------------------------------

Excel provides retail telecommunications services such as long distance, paging and Internet services to residential and business customers in North America and the U.K. On August 26, 2001, Teleglobe Inc. and certain of its subsidiaries entered into definitive agreements for the sale of Excel's North American operations to an affiliate of VarTec Telecom, Inc. (VarTec). The U.K. operations, which are not part of the transaction, are planned to be discontinued before the end of the year. Consequently, the results of Excel have been reported as discontinued operations. The gross proceeds, estimated at approximately US $250 to $300 million, will be based on Excel's actual 2001 financial results and will be paid in the form of unsecured five-year interest-bearing promissory notes. After accounting for the discount provision on the notes receivable, closure costs of the U.K. operations, transaction costs, estimated operating losses up to the expected date of disposal and related items, it is estimated that the disposal of Excel will not result in any gain or loss. The sale is subject to regulatory and other approvals and is expected to be completed by the end of the first quarter of 2002. The results of operations of Excel include an impairment charge of $2,049 million, recorded in the first quarter of 2001, after completion of an assessment of the carrying value of BCE's investment in Excel.

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. In September 2001, BCI wrote off its carrying value of $86 million in Vesper S.A., Vesper Sao Paulo S.A. and Vento S.A. Ltda.

      Amounts included in the consolidated balance sheets relating to
discontinued operations are as follows:

---------------------------------------------------------------
($ millions)                    September 30     December 31
                                        2001            2000
---------------------------------------------------------------
Current assets                           571             700
Non-current assets                       700           3,569
Current liabilities                    (561)           (902)
Non-current liabilities                (213)           (639)
                                       -----           -----
Net assets of discontinued operations    497           2,728
---------------------------------------------------------------
      The summarized statements of operations for the discontinued
operations are as follows:

---------------------------------------------------------------
($ millions)               Three months        Nine months
For the period
ended September 30         2001      2000     2001      2000
---------------------------------------------------------------
Revenue                    293        88       975       347
                        ------    ------    ------    ------
Operating earnings
(loss)
from discontinued
operations,
net of tax                   -     (142)   (2,234)     3,753
Gain (loss) on
discontinued operations,
net of tax                (86)     1,031       416     1,031
Non-controlling
interest                    22     (240)      (78)     (200)
                        ------    ------    ------    ------

Net earnings (loss) from
discontinued operations   (64)       649   (1,896)     4,584
---------------------------------------------------------------

      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:

---------------------------------------------------------------
                           Three months         Nine months
For the period
ended September 30        2001      2000      2001      2000
---------------------------------------------------------------
Earnings (loss) from
continuing operations
(numerator) ($ millions)
Earnings (loss) from
continuing operations     (66)        10     2,731       290
Dividends on preferred
shares                    (16)      (19)      (50)      (61)
                        ------    ------    ------    ------
Earnings (loss) from
continuing operations
- basic                   (82)       (9)     2,681       229
Exercise of put options
by CGI shareholders          -       (5)       (1)      (14)
                        ------    ------    ------    ------
Earnings (loss) from
continuing operations
- diluted                 (82)      (14)     2,680       215
---------------------------------------------------------------
Weighted average number
of common shares
outstanding (denominator)
(millions)
Weighted average number
of common shares
outstanding - basic      807.9     644.7     807.8     644.4
Exercise of stock options  2.2       2.0       2.3       2.2
Exercise of put options
by CGI shareholders        5.6       3.8       5.6       3.8
                        ------    ------    ------    ------
Weighted average number
of common shares
outstanding - diluted    815.7     650.5     815.7     650.4
---------------------------------------------------------------

Note 7. Business acquisitions

Acquisitions of CFCF-TV & CKY-TV Effective September 1, 2001, Bell Globemedia completed the acquisitions of all of the outstanding common shares of CFCF-TV and CKY-TV, two CTV affiliated television stations in Montreal and Winnipeg, for a total aggregate cash consideration of approximately $182 million. The acquisitions were accounted for using the purchase method. The preliminary allocation of the total purchase price was to tangible assets for $33 million, tangible liabilities for $40 million (including $23 million of benefits and other costs payable on the acquisition) and goodwill and other intangible assets for $189 million.

Acquisition of Tess S.A.

On April 9, 2001, Telecom Americas Ltd. (Telecom Americas), a joint venture of BCI (BCI currently holds a 41.7% interest in Telecom Americas), closed its previously announced agreement to acquire a 100% interest in Tess S.A. (Tess), one of two B Band cellular companies operating in the Brazilian state of Sao Paulo, for a total consideration of approximately US $950 million ($1,480 million, of which $617 million represents BCI's proportionate interest). The consideration consisted of US $319 million in cash and US $631 million in notes payable, which had a fair value of US $571 million, making the effective purchase price US $890 million. Subsequently, on April 10, 2001, Telecom Americas announced that it had granted to Bell South International Inc. (Bell South), an option to purchase 50% of Telecom Americas' stake in Tess. The option expired in October 2001. The acquisition of Tess was accounted for using the purchase method. The preliminary allocation of BCI's proportionate interest of the purchase price of $617 million was to tangible assets for $793 million, tangible liabilities for $638 million and goodwill for $462 million. Goodwill is being amortized on a straight-line basis over 12 years.

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

On March 27, 2001, Telecom Americas invested $470 million (US $300 million) in ATL, increasing Telecom Americas' total economic ownership in ATL from 50% to 59%. Consequently, the accounting for ATL was changed from proportionate consolidation to full consolidation as of that date. As a result of this transaction, BCI indirectly invested $208 million (US $133 million) in ATL and increased its effective economic interest from 22.1% to 26.1%. The acquisition of ATL was accounted for using the purchase method. The allocation of BCI's proportionate interest of the purchase price was to tangible assets for $483 million, tangible liabilities and minority interest for $360 million and goodwill for $85 million. Goodwill is being amortized on a straight-line basis over 12 years.

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

On March 13, 2001, Telecom Americas announced a number of agreements which will collectively result in the acquisition of an approximate additional 65% economic interest in the Brazilian cellular companies Telet and Americel (increasing Telecom Americas' economic interest to approximately 81% in both companies) for an aggregate purchase price of approximately US $580 million. At September 30, 2001, Telecom Americas had purchased an additional 60% interest in Telet and Americel for approximately US $528 million.

Teleglobe Inc. acquisition

During the first quarter of 2001, 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.

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 that 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 8. 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.