Year-over-year financial trends continue to improve from prior year
IPTV customer base exceeds 100,000
Total data revenues grow $21 million, up 9.6 per cent
IPTV revenues up $10 million
Internet revenues up $10 million
Net NAS declines improve 14 per cent over prior year
This news release contains forward-looking statements. For a description
of the related risk factors and assumptions, please see the section
entitled "Forward-looking information" later in this release.
HALIFAX, Oct. 30, 2012 /CNW/ - Bell Aliant Inc. (TSX: BA) today reported
financial results for the third quarter of 2012 for Bell Aliant Inc.
(Bell Aliant) and Bell Aliant Regional Communications Inc. (Bell Aliant
"We had another productive quarter in Q3 as we further expanded our
fibre-to-the-home (FTTH) coverage area and had our best quarter yet for
new FibreOPTM customer additions," said Karen Sheriff, president and chief executive
officer, Bell Aliant. "I am very pleased that more and more customers
are coming on board and experiencing our great FibreOP TV and Internet services.
"We now have over 100,000 IPTV customers and IPTV was our largest area
of revenue growth in the quarter. We also had strong Internet revenue
growth and our NAS declines again were better than the same quarter
last year, following the trends we have experienced in prior quarters
"We have been adding more FibreOP customers with each passing quarter, and with more than half of the
homes in Atlantic Canada now having access to these services, we are
beginning to have sufficient FibreOP scale to make a difference in our overall results. This kind of steady
progress is what we envisioned when we launched our FTTH rollout in
2009. While we expect 650,000 premises to have access to our FibreOP services by the end of this year, we will still have more to do. I
expect to announce our plan for further expansion in early 2013."
Third quarter 2012 highlights1
Bell Aliant Inc. reported net earnings of $92 million for the third
quarter of 2012, up $16 million (21.6 per cent) compared to the same
quarter of 2011. Earnings per share and adjusted earnings per share in
the quarter were $0.40 and $0.47 respectively, compared to $0.33 and
$0.41 in the same quarter of 2011. The earnings increase was primarily
attributable to lower restructuring charges in the third quarter of
2012 compared to the same quarter of 2011.
Third quarter financial highlights of Bell Aliant GP are summarized as
(In millions of dollars)
Free Cash Flow*
* Year to date 2011 free cash flow excludes a $200 million lump sum
contribution to defined benefit plans made in Q1 2011.
Operating revenues in the third quarter of 2012 were $697 million, down
$3 million (0.4 per cent) from the same quarter in 2011. Growth in data
revenues, including Internet and TV, wireless and other revenues
largely offset declines in local and long distance revenues. Operating
expenses in the third quarter of 2012 were up $2 million from the same
quarter in 2011, reflecting growth in TV content costs from higher FibreOP TV customers and other costs of revenues, which were largely offset by
productivity savings. As a result, EBITDA declined $5 million (1.5 per
cent) in the third quarter of 2012 compared to the same quarter in
Capital expenditures in the third quarter of 2012 were $144 million,
down $18 million (11.0 per cent) from the same quarter a year earlier,
mainly due to lower FTTH footprint expansion in the third quarter of
2012 compared to the same quarter in 2011. In the third quarter of
2012, Bell Aliant passed an additional 47,000 homes and businesses with
FTTH compared to 104,000 incremental premises in the third quarter of
2011. Total FTTH coverage reached 621,000 premises at the end of
September 2012 and Bell Aliant continues to expect to reach 650,000
premises with FTTH by the end of the year.
Free cash flow was $113 million in the third quarter of 2012, up $3
million from the same quarter a year earlier. The increase was
primarily a result of lower capital expenditures offset by lower EBITDA
and lower cash from changes in working capital in the third quarter of
2012 compared to the third quarter of 2011.
Total data revenue including Internet and TV increased $21 million (9.6
per cent) in the third quarter of 2012 compared to the same period in
Internet revenue increased $10 million (7.9 per cent) with residential
high-speed average revenue per customer (ARPC) in the third quarter of
2012 up 7.1 per cent from the same quarter a year earlier. Selected
pricing action, lower promotional discount effects and customer
movement to premium services, including FibreOP, drove the increase. FibreOP Internet customers grew by 16,500, bringing total FibreOP Internet customers to 92,000 at the end of September 2012. FibreOP Internet additions include existing Bell Aliant customers migrating
from DSL and fibre-to-the-node (FTTN) networks to the upgraded service.
These migrations do not contribute to overall high-speed customer
growth, but increasingly contribute to improved customer retention and
growth in overall customer ARPC. Overall net high-speed Internet
customer additions were 7,500 in the third quarter of 2012, bringing
total high-speed Internet customers to 913,600 at the end of September
2012, up 2.4 per cent from a year earlier.
IPTV revenue grew $10 million in the third quarter of 2012 compared to
the third quarter of 2011 with total IPTV customers of 107,400 at the
end of September 2012. FibreOP TV customers grew by 14,200 in the quarter to reach 79,500, a portion
of which were migrations from Bell Aliant's FTTN TV service. Overall
net IPTV customer additions were 12,300 in the third quarter of 2012,
compared to 9,000 a year earlier.
Other data revenue grew $2 million (1.7 per cent) in the third quarter
of 2012 from the same quarter a year earlier, continuing the improved
trends of recent quarters as a result of data demand growth.
Local service and long distance revenues declined $16 million (5.0 per
cent) and $12 million (12.0 per cent), respectively, in the third
quarter of 2012 compared to the same quarter in 2011, driven by NAS
declines of 5.1 per cent. Net NAS declines of 32,400 in the third
quarter of 2012 improved 14 per cent from the same quarter in 2011 with
improved residential customer activations, winbacks and retention in FibreOP markets.
Wireless revenues were up $3 million (9.7 per cent) in the third quarter
of 2012 compared to the same quarter in 2011, driven by 6.8 per cent
customer growth and 2.5 per cent wireless ARPC growth compared to a
year ago. Other revenues also increased $1 million (2.3 per cent) in
the third quarter compared to a year ago, driven largely by higher
Bell Aliant's Board of Directors today declared a quarterly dividend of
$0.4750 per common share, payable on December 31, 2012 to shareholders
of record at the close of business on December 14, 2012.
Bell Aliant Preferred Equity Inc. today declared a dividend on its
Series A Preferred Shares of $0.303125 per share and a dividend on its
Series C Preferred Shares of $0.284375 per share to be paid on December
31, 2012 to shareholders of record at the close of business on December
Unless otherwise stated, dividends paid by Bell Aliant and Bell Aliant
Preferred Equity Inc. to Canadian residents are "eligible dividends" as
defined by the Canadian Income Tax Act and corresponding provincial
More information on Bell Aliant's and Bell Aliant GP's third quarter
2012 results can be found in Bell Aliant's third quarter 2012
supplementary financial information package and MD&A and Bell Aliant
GP's third quarter 2012 MD&A available at www.bellaliant.ca/investors .
Analyst conference call
A conference call with the financial community is scheduled for October
30, 2012 at noon (EDT). The dial-in numbers are 866-226-1792 and
416-340-2216 for Toronto area participants. Media are invited to attend
in listen-only mode. A replay of the session can be heard until
November 27, 2012. To access the replay, dial 800-408-3053 or
905-694-9451 and enter the passcode 3266319.
A live audio webcast of the conference call can be accessed at www.bellaliant.ca/investors . A replay of the conference call will be available on the website for
1See Notes section at the end of this release for definitions of the
non-International Financial Reporting Standard (IFRS) financial
measures including EBITDA, free cash flow and adjusted earnings per
The information contained in this news release is unaudited.
(1) Bell Aliant derives virtually all of its income from its ownership
in Bell Aliant GP. Bell Aliant GP's results consolidate the results of
Bell Aliant Regional Communications, Limited Partnership; Télébec,
Limited Partnership; NorthernTel, Limited Partnership; and Bell Aliant
Preferred Equity Inc.
(2) Percentage changes quoted in this release related to dollar values
are based on amounts rounded to the nearest hundred-thousand,
consistent with disclosure in Bell Aliant's supplementary financial
information package and Bell Aliant Inc.'s and Bell Aliant GP's MD&As
for the third quarter of 2012. Dollar values quoted in this release are
rounded to the nearest million unless otherwise stated. Customer
metrics are rounded to the nearest hundred unless otherwise stated.
(3) Definitions of non-IFRS measures:
a. EBITDA: Bell Aliant defines EBITDA as operating revenue less operating expenses
(operating income) before interest, income taxes, depreciation and
amortization expense, severance and other charges.
b. Free cash flow: Bell Aliant defines free cash flow as cash generated from operating
activities less capital expenditures. Free cash flow includes the
operations of Bell Aliant and Bell Aliant GP on a combined basis.
c. Adjusted earnings per share: Bell Aliant defines adjusted earnings per share as fully diluted
earnings per share adjusted for the per share effect of purchase price
allocation amortization, net of income taxes.
For a reconciliation of these non-IFRS measures to the most closely
comparable IFRS measures, please refer to Bell Aliant GP's MD&A for the
third quarter of 2012 available at www.bellaliant.ca/investors and www.sedar.com .
This news release contains forward-looking statements concerning
anticipated future events, results, circumstances or expectations, in
particular statements concerning FTTH expansion plans. Unless otherwise
indicated, such forward-looking statements describe management's
expectations at October 30, 2012. These statements are based on
management's beliefs regarding future events, many of which, by their
nature, are inherently uncertain and beyond management's control. These
statements are not guarantees of future performance and are subject to
assumptions which may prove to be inaccurate and numerous risks and
uncertainties which are difficult to predict.
Bell Aliant encourages investors to review the risk factors section
below, and related disclosures, for a discussion of the various factors
that could cause actual results to differ from what is currently
There are many factors that could cause results or events to differ
materially from current expectations. The most significant factors that
Bell Aliant has identified that may affect Bell Aliant's results or
events in 2012 include but are not limited to: increasing competition;
management's ability to achieve strategies and plans, including
expansion of its FTTH network and managing the cost structure; general
economic conditions; pension valuation and investment risk; reliance on
systems; changing technology; demand for products and services; the
business relationship with BCE Inc. (BCE) and Bell Canada; changing
regulations; dependence on key suppliers; maintenance of credit
ratings; leverage and restrictive covenants; BCE's governance rights;
reliance on key personnel and labour relations; legal contingencies and
changes in laws; and tax-related risks. Some of these risk factors are
largely beyond Bell Aliant's control. For additional information on
material factors and assumptions used to develop forward-looking
information, and risk factors that could cause actual results to differ
materially from forward-looking information, see also the "Risks that
could affect our business and results" section of Bell Aliant Inc.'s
MD&A for the year ended December 31, 2011, and the "Assumptions made in
the preparation of forward-looking information" and "Risks that could
affect our business and results" sections of Bell Aliant GP's MD&A for
the year ended December 31, 2011, as updated by the first, second and
third quarter 2012 MD&As, as well as the "Risk Factors" sections of
Bell Aliant Inc.'s and Bell Aliant GP's 2011 Annual Information Forms.
These documents are available at www.bellaliant.ca and www.sedar.com .
Should any risk factor affect Bell Aliant in an unexpected manner, or
should assumptions underlying the forward-looking statements prove
incorrect, the actual results or events may differ materially from the
results or events predicted. Unless otherwise indicated,
forward-looking information does not take into account the effect that
transactions or non-recurring or other special items, announced or
occurring after this information is provided, may have on the business.
All forward-looking information reflected in this news release and the
documents referred to within it are qualified by these cautionary
statements. There can be no assurance that the results or developments
anticipated by Bell Aliant will be realized or, even if substantially
realized, that they will have the expected consequences for Bell
Except as may be required by Canadian securities laws, Bell Aliant
disclaims any intention and assumes no obligation to update or revise
any forward-looking information, even if new information becomes
available, as a result of future events or for any other reason.
Readers should not place undue reliance on any forward-looking
information. Forward-looking information is provided for the purpose of
providing information about management's current expectations and plans
relating to fiscal 2012 or other future periods. Readers are cautioned
that such information may not be appropriate for other purposes.
About Bell Aliant
Bell Aliant (TSX: BA) is one of North America's largest regional
communications providers and the first company in Canada to cover an
entire city with FTTH technology with its FibreOP services. Through its operating entities, it serves customers in six
Canadian provinces with innovative information, communication and
technology services including voice, data, Internet, video and
value-added business solutions. Bell Aliant's employees deliver the
highest quality customer service, choice and convenience.
SOURCE: BELL ALIANT INC.
For further information:
Sarah Levy MacLeod