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Results speak volumes BCE INC. 2014 ANNUAL REPORT and they’re getting louder. OUR GOAL To be recognized by customers as Canada’s leading communications company. OUR STRATEGIC IMPERATIVES Accelerate wireless 10 Leverage wireline momentum 12 Expand media leadership 14 Invest in broadband networks and services 16 Achieve a competitive cost structure 17 Improve customer service 18 With a strategy to lead in broadband investment and innovation, Bell is delivering advanced networks, next generation communications growth services, and a better service experience to our more than 21 million consumer and business customers in every region of Canada. Our results speak volumes about our commitment to deliver for you. In 2014, the Bell team achieved all our financial goals; gained significant share of wireless, Internet and TV customer growth; created exceptional value for shareholders; and positioned Bell for future success in a dynamic and competitive marketplace. Financial and 4 Management’s discussion 24 operational highlights and analysis (MD&A) Letters to shareholders 6 Reports on internal control 110 Strategic imperatives 10 Consolidated financial statements 114 Community investment 20 Notes to consolidated 118 financial statements Bell archives 22 2 We achieved all Bell and BCE financial targets in 2014. Centred on our 6 Strategic Imperatives and underpinned by a sound capital markets strategy, Bell’s business model is delivering results in a competitive marketplace. DELIVERING INCREASED SHAREHOLDER VALUE 2014 FINANCIAL PERFORMANCE TOTAL SHAREHOLDER RETURN INCREASE IN DIVIDEND Bell Actual Target Result IN 2014 (1) PER COMMON SHARE FOR 2015 Revenue 3.5% 2%–4% growth % % Adjusted 3.7% 3%–5% EBITDA growth (3) 21.7 5.3 Capital 16.8% 16%–17% intensity TOTAL SHAREHOLDER RETURN INCREASE IN DIVIDEND PER COMMON SHARE SINCE THE END OF 2008 (1) (2) SINCE THE END OF 2008 BCE Actual Target Result Adjusted $3.18 $3.10– % % EPS (3) $3.20 Free 6.7% 3%–7% Cash Flow 194 78 growth (2) COMPARATIVE TOTAL RETURN Since 2014 2008 BCE 21.7% 194% S&P/TSX Composite Index 10.6% 94% S&P/TSX Telecom Index 13.3% 122% (1) Assumes the reinvestment of dividends. (2) Total return since the end of 2008, the year Bell implemented its transformational strategy. (3) Adjusted EBITDA, Adjusted EPS and Free Cash Flow are non-GAAP financial measures and do not have any standardized meaning under IFRS. Therefore they are unlikely to be comparable to similar measures presented by other issuers. For a full description of these measures, see section 10.2, Non-GAAP financial measures and key performance indicators (KPIs) on pp. 106 to 109 of the MD&A. 3 FINANCIAL AND OPERATIONAL HIGHLIGHTS Wireless, TV, Internet and Media growth services are driving Bell’s transformation. Canada’s communications BCE SUBSCRIBERS* (MILLIONS) leader since 1880, Bell has now moved to the 2014 2013 Growth forefront of advanced Wireless 8.1 7.9 +2.4% broadband networks and High-speed Internet 3.3 3.1 +5.1% services. With unparalleled Television 2.6 2.5 +6.2% investments in high-speed fibre and mobile 4G LTE, Total growth services 14.1 13.5 +3.7% high-capacity data centres Local telephone services 7.1 7.6 -6.1% and premium content, Total subscribers 21.2 21.1 +0.2% Bell is the new leader in the communications growth services of TOTAL INCREASE IN GROWTH SERVICES today and tomorrow – SUBSCRIBERS 2014 SUBSCRIBERS 2014/2013 Wireless, Internet, Television and Media. 21.2M 3.7 % * Rounding in numbers may affect total figures presented. 4 Growth services % 12 deliver revenue results Media With the integration of % 30 Bell Aliant, Wireless, TV, Wireless % 39 Wireline % Internet and Media growth 37 Broadband & TV Wireline services accounted for % Broadband 25 & TV Wireless 79% of BCE revenue in 2014, % 36 up from just 64% in 2008. Wireline 2014 2008* Voice 79% 64 % Total Total $ Growth Growth 17.7B Services Services % 21 Wireline Voice 11% $21.0B Home Phone BCE OPERATING REVENUE BCE ADJUSTED EBITDA BCE NET EARNINGS ($ BILLIONS) ($ BILLIONS) ($ BILLIONS) $1.7 ’14 ’13 ’09* ’14 ’13 ’09* ’14 ’13 ’09* $17.7 $7.1 % % % +3.1 +2.6 +13.8 $2.4 $20.4 $8.1 % % $8.3 % +18.6 $21.0 +17.1 +56.4 $2.7 CASH FLOW FROM OPERATING ACTIVITIES FREE CASH FLOW FREE CASH FLOW PER SHARE ($ BILLIONS) ($ BILLIONS) ($) * * * ’14 ’13 ’09 ’14 ’13 ’09 $2.0 ’14 ’13 ’09 $4.9 $2.58 -3.6% +6.7% +4.5% $2.6 $6.5 $3.31 % % % +27.8 $6.2 +37.5 $2.7 +34.1 $3.46 * In accordance with previously reported Canadian GAAP. For more information, please refer to Section 7 of the MD&A – Selected Annual and Quarterly Information, page 86. 5 LETTERS TO SHAREHOLDERS MESSAGE FROM THE CHAIR OF THE BOARD Delivering results for all Bell stakeholders: A year of great progress for your company. Guided by the highest Dear fellow shareholders, standards of corporate 2014 was a year of tremendous governance, BCE works to progress for your company. serve our shareholders, Bell grew its leadership in building the broadband communications customers, communities networks of today and tomorrow. and team. In 2014, We enhanced the customer service we successfully delivered experience as we increased the efficiency of our operations and increased returns for reduced costs. And we undertook investors while undertaking judicious transactions to execute our the significant capital Strategic Imperatives and accelerate expenditures necessary to growth opportunities. fuel Bell’s strategic execution The result was exciting service in the marketplace innovation for customers, strong operating and financial and enable our growth and performance, and growing value investment into the future. for BCE shareholders. At the same time, we led the advancement of Canada’s critical communications infrastructure and made significant charitable investments in communities small and large nationwide with the Bell Let’s Talk initiative. Consistently improving results underscore the strength of the business model Bell has built around the 6 Strategic Imperatives, supported by a prudent capital markets strategy with a strong balance sheet, investment grade credit ratings and the highest levels of corporate governance. 6 139 % BCE’s five-year SHAREHOLDER total shareholder return VALUE With results in the marketplace and a focus on dividend growth, we’re delivering exceptional returns to BCE shareholders. Delivering for shareholders In November, we were pleased to Two Bell leaders were acknowledged welcome two of Canada’s most as Women of the Year by the national Competitive success in the accomplished and respected business Women in Communications and marketplace in 2014 and a healthy leaders to the BCE Board of Directors: Technology organization: In 2014, CTV financial position enabled us to Robert Dexter, QC, Chief Executive News President Wendy Freeman, and provide substantial returns to the Officer of Maritime Travel, Chair of in 2015, Mary Ann Turcke, formerly shareholders who believe in us. With Sobeys and Empire Company Limited Executive Vice President of Field a target payout of between 65% and and former member of the Bell Aliant Operations and now Group President 75% of free cash flow, BCE is growing board; and Gordon Nixon, CM, O.Ont, of Sales at Bell Media. Bell was also your dividend in line with our strong formerly President and CEO of the named one of Montréal’s Top free cash flow generation. Royal Bank of Canada, a Director of Employers for the third year in a row. BCE announced a 5.3% increase in the George Weston Limited and On behalf of the Board, I would like to common share dividend for 2015, the Chairman of MaRS. recognize the outstanding leadership eleventh such increase since the end Returning to public service, of our CEO George Cope and his of 2008 representing overall dividend the Hon. James Prentice, PC, QC executive team, including our retiring growth of 78%. Total shareholder departed the Board in May after Chief Financial Officer Siim Vanaselja, return in 2014 was 21.7%, well ahead serving as a Director since 2011 for leading Bell’s rapid transformation of our industry peers including major while André Bérard, OC, OQ into the innovative, customer-focused U.S. operators as well as the S&P/TSX retired in August after more than competitor we are today. Composite Index. Five-year total 11 years with your Board. We are shareholder return was 139%, and Bell’s more than 57,000 employees grateful for their invaluable service 194% since the end of 2008 following working everywhere across the to our shareholders, customers the implementation of Bell’s nation are well equipped to prevail in and company. transformational strategy. a dynamic and competitive business environment. Our industry changes In 2014, we raised $1.25 billion in new Bell in the community rapidly, but the Bell team has proven public debt that significantly lowered The Bell team was pleased to be more than equal to the challenge. Bell’s after-tax rate of borrowing. acknowledged for our work in the We thank you for your support. Effectively managing our pension community in 2014. Alongside a obligations, BCE also announced a spectacular Bell Let’s Talk Day that $350 million voluntary pension plan set new records for engagement in contribution in 2014, an efficient use the cause, our mental health of cash that aligns the privatized Bell initiative was recognized by the Aliant plan and reduces the amount Québec Order of Psychologists and Thomas C. O’Neill of BCE’s future pension payments. by Excellence Canada with a Gold Chair of the Board Award for Mental Health at Work. BCE Inc. 7 MESSAGE FROM THE PRESIDENT & CEO Marketplace success and shareholder value: Bell transformed as a growth services competitor.

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