Click here to close now.




















Welcome!

News Feed Item

Bell Aliant reports second quarter 2014 results

  • Net earnings improve $6 million over Q2 2013
  • Positive overall customer unit growth with best quarterly performance in Bell Aliant's history
    • Internet and IPTV customer growth more than offsets network access services (NAS) declines
    • High-speed Internet net additions more than double, up 7,700  from Q2 2013
    • FibreOPTM Internet adds 17,100 net new customers to reach 217,100
    • FibreOP TV adds 14,200 net new customers to reach 185,600
    • Net NAS declines improve 8,400 (25.3 per cent) from Q2 2013
  • Fibre-to-the-home (FTTH) passes 879,000 premises, on track to pass 1 million premises by end of 2014
  • BCE privatization offer of $31 per Bell Aliant share expected to close by November 30, 2014

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, Aug. 1, 2014 /CNW/ - Bell Aliant Inc. (TSX: BA) today reported financial results for the second quarter of 2014 for Bell Aliant Inc. (Bell Aliant) and Bell Aliant Regional Communications Inc. (Bell Aliant GP).

"We achieved a significant milestone in the second quarter of 2014, growing our overall customer unit base with the best unit growth performance in Bell Aliant's history," said Karen Sheriff, president and chief executive officer, Bell Aliant. "Competition throughout our territory continues to be intense, and I am extremely pleased with the customer additions we have been able to achieve in this environment.

"Our expanding fibre-to-the-home network with our FibreOP service offerings drove customer growth from high-speed Internet and IPTV to more than offset customer declines in our traditional legacy business. Not only did we achieve strong growth in our broadband services customer bases, we significantly improved customer declines in our legacy voice services.

"Along with strong customer growth performance, in the second quarter of 2014, we also continued to demonstrate disciplined cost management, holding expenses essentially flat to the same quarter in 2013.    

"Our second quarter results were very much in line with our expectations and I am extremely proud of our team's continued solid execution of our strategy. Sticking to our plan has put us in the strong position we are today to provide value to both our customers and shareholders," concluded Ms. Sheriff.

Privatization Offer

On July 23, 2014, BCE and Bell Aliant announced that BCE had made an offer to take Bell Aliant private. Bell Aliant's board of directors, other than those who are BCE executives and therefore did not participate in the vote, have unanimously recommended that shareholders accept the offer.  Under BCE's proposal, Bell Aliant public minority shareholders will receive cash and BCE common shares for a combined value of $31 per Bell Aliant share. Public minority shareholders of Bell Aliant can elect to receive, for each common share, either (a) $31 in cash, (b) 0.6371 of a BCE common share, or (c) $7.75 in cash and 0.4778 of a BCE common share. Shareholders electing alternative (a) or (b) will be subject to pro-ration such that the aggregate consideration will be paid 25 per cent in cash and 75 per cent in BCE common shares. As part of the offer, Bell Aliant will not pay a common dividend for the third quarter of 2014. For greater clarity, Bell Aliant public minority shareholders who elect to receive BCE common shares will not receive BCE's Q3 common share dividend on the BCE shares received through the tender process.

BCE will also offer holders of preferred shares of Bell Aliant Preferred Equity Inc. (Prefco) the opportunity to exchange their Prefco preferred shares for BCE preferred shares with the same financial terms as the existing Prefco preferred shares, subject to terms and conditions of the offer.  Completion of the Bell Aliant privatization is not conditional on completion of the preferred share exchange.

"This transaction is a next logical step for Bell Aliant and provides attractive value for our minority shareholders," continued Ms. Sheriff.  "It creates immediate value for them with an offer price at an approximate 11.6 per cent premium to Bell Aliant's weighted-average closing share price for the 20-day period ending July 22, 2014, and at the high end of the fair valuation range determined by an independent valuator.  Taxable Canadian shareholders who receive BCE shares as consideration will generally be entitled to a roll-over to defer Canadian taxation on capital gains. And importantly, the transaction gives Bell Aliant public minority shareholders the opportunity to acquire ownership in BCE, a company with a strong asset mix, a history of strong dividend growth, and an attractive investment-grade credit profile, providing growth opportunities for public minority shareholders."

BCE expects the privatization transaction to be completed by November 30, 2014, subject to more than 50 per cent of Bell Aliant common shares held by public minority shareholders being tendered to the offer, and other conditions set forth in the support agreement for the offer which is available under Bell Aliant's profile on www.sedar.com.

Second Quarter 2014 Highlights1

Bell Aliant Inc. reported net earnings of $72 million in the second quarter of 2014, up $6 million from the same quarter in 2013. The increase was driven by higher earnings in Bell Aliant GP, with lower finance and income tax expenses more than offsetting lower adjusted EBITDA and higher restructuring costs compared to the second quarter in 2013. Earnings per share and adjusted earnings per share for the second quarter of 2014 were $0.32 and $0.39 respectively, compared to $0.29 and $0.39 in the second quarter of 2013.

Second quarter financial highlights of Bell Aliant GP are summarized as follows:

 

(In millions of dollars)

(unaudited)

Q2 2014

Q2 2013

Change

YTD

2014

YTD

2013

Change

Operating Revenue

$683

$692

(1.3%)

1,358

1,375

(1.3%)

Adjusted EBITDA (1)

318

327

(2.6%)

635

650

(2.4%)

Capital Expenditures

146

157

(6.6%)

281

285

(1.5%)

Free Cash Flow (1)

131

153

(14.8%)

104(2)

248

(57.9%)

(1) Adjusted EBITDA, free cash flow and adjusted earnings per share are non-IFRS measures. Refer to the "Non-IFRS financial measures" section of Bell Aliant GP's Q2 2014 Management's Discussion and Analysis (MD&A) for details.

(2) Free cash flow in 2014 included a one-time catch-up income tax payment of approximately $65 million in the first quarter of 2014 related to the elimination under applicable tax laws of the ability to defer partnership income.

 

Operating revenues in the second quarter of 2014 were $683 million, down $9 million (1.3 per cent) from the same quarter in 2013. Growth in Internet, TV, other data, and wireless revenues was offset by declines in local, long distance, and other revenues. Operating expenses in the second quarter of 2014 declined $1 million from the same quarter in 2013, as continued savings from productivity initiatives offset normal inflationary pressures and growth in promotional and TV content costs from a growing FibreOP customer base. As a result, adjusted EBITDA declined 2.6 per cent in the second quarter of 2014 compared to the same quarter in 2013.

Capital expenditures in the second quarter of 2014 were $146 million, down $11 million (6.6 per cent) from the same quarter a year earlier. Capital expenditure increases from higher FTTH footprint expansion and higher FibreOP customer connections in the second quarter of 2014 were more than offset by lower spending on DSL expansion and the completion of several large business customer network projects in 2013. 

Free cash flow in the second quarter of 2014 was $131 million, down $22 million from the same quarter in 2013, primarily as result of higher cash income taxes and lower adjusted EBITDA, somewhat offset by lower capital expenditures and less use of cash for changes in working capital.

Revenue details

Internet revenue increased $7 million (4.8 per cent) driven by growth in high-speed Internet customers of 4.7 per cent and growth in residential high-speed average revenue per customer (ARPC) of 2.3 per cent from the same quarter in 2013.  FibreOP Internet customers grew by 17,100 during the quarter, bringing total FibreOP Internet customers to approximately 217,100 at the end of June 2014. 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 average revenue per customer. Overall high-speed Internet customer net additions were 13,900 in the second quarter of 2014, up from 6,200 in the same quarter of 2013, bringing total high-speed Internet customers to 977,000 at the end of June 2014.

IPTV revenue grew $12 million (38.3 per cent) in the second quarter of 2014 compared to the same quarter in 2013, with total IPTV customers of 202,400, up 36.1 per cent from a year earlier. FibreOP TV customers grew by 14,200 in the second quarter to reach 185,600, a portion of which were migrations from Bell Aliant's FTTN TV service. Overall net IPTV customer additions were 12,600 in the second quarter of 2014, compared to 11,500 a year earlier.

Other data revenues increased $4 million (3.9 per cent) in the second quarter of 2014 compared to the same quarter in 2013, as a result of IP data services growth enabled by Bell Aliant's expansion of its next generation network technology.

Local service and long distance revenues declined $15 million (5.3 per cent) and $11 million (13.9 per cent), respectively, in the second quarter of 2014 compared to the same quarter in 2013, driven largely by NAS declines of 5.3 per cent. Overall net NAS declines improved 25.3 per cent from the same quarter in 2013. Residential net NAS declines of 20,000 in the second quarter of 2014 improved 6,700 from the same quarter in 2013, with improved performance in both fibre and non-fibre markets. Business net NAS declines of 4,900 in the second quarter of 2014 improved 1,800 from the same quarter a year earlier.

Wireless revenues were relatively flat in the second quarter of 2014 compared to the second quarter in 2013, as the benefits of increases in wireless customers were offset by lower ARPC from competitive pressures and lower roaming rates. Overall wireless customers were up 1.8 per cent at the end of June 2014 from a year earlier with growth in postpaid wireless customers of 3.5 per cent offset by declines in prepaid wireless customers, reflecting industry trends.

Other revenues were down $6 million (15.2 per cent) in the second quarter of 2014 compared to the same quarter in 2013, due to lower product sales and a decrease in the volume of custom work in Q2 2014.

Declared Dividends

As part of the BCE privatization offer, the quarterly dividend on common shares that would otherwise have been payable on October 6, 2014 will not be declared or paid by Bell Aliant.

Bell Aliant Preferred Equity Inc. declared a dividend on its Series A Preferred Shares of $0.303125 per share, a dividend on its Series C Preferred Shares of $0.284375 per share, and a dividend on its Series E Preferred Shares of $0.265625 per share, each to be paid on September 30, 2014, to shareholders of record at the close of business on September 15, 2014.

Unless otherwise stated, dividends paid by Bell Aliant Preferred Equity Inc. to Canadian residents are "eligible dividends" as defined by the Canadian Income Tax Act and corresponding provincial legislation.

Additional Information

More information on Bell Aliant's and Bell Aliant GP's second quarter 2014 results can be found in Bell Aliant's second quarter 2014 supplementary financial information package and Bell Aliant and Bell Aliant GP's second quarter 2014 MD&As, available at www.bellaliant.ca/investors and on SEDAR at www.sedar.com.

Analyst Conference Call

A conference call with the financial community is scheduled for:

August 1, 2014 at 8:00 a.m. (Eastern)
Dial-in 866-789-9572 or 416-340-2217 for Toronto area participants, passcode 6196776#.

A live audio webcast of the conference call can be accessed on www.bellaliant.ca under the Investor Relations section. Media are invited to attend in listen-only mode.

A replay of the session can be heard until August 31, 2014.
To access the replay, dial 800-408-3053 or 905-694-9451 and enter the passcode 8669410#.

Notes

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 information package and Bell Aliant GP's MD&A for the second quarter of 2014. 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.

Adjusted EBITDA: Bell Aliant defines adjusted EBITDA as net earnings before finance costs, other expense, income tax expense, depreciation and amortization, and severance and other charges.





b.

Free cash flow: Bell Aliant defines free cash flow as cash from operating activities less capital expenditures. Free cash flow includes the cash performance of Bell Aliant and Bell Aliant GP on a combined basis.





c.

Adjusted earnings per share (EPS): Bell Aliant defines adjusted EPS as diluted EPS of Bell Aliant Inc. adjusted for the per share after-tax effect of purchase price allocation amortization, severance and other charges, and debt redemption loss, recorded by Bell Aliant GP.

 

For a reconciliation of these non-IFRS financial measures to the most closely comparable IFRS financial measures, please refer to Bell Aliant GP's MD&A for the second quarter of 2014 available at www.bellaliant.ca/investors and www.sedar.com.

Forward-looking Information
This news release contains forward-looking statements concerning anticipated future events, results, circumstances or expectations, in particular the privatization of Bell Aliant by BCE. Unless otherwise indicated, such forward-looking statements describe management's expectations at August 1, 2014. 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.

Risk factors
There are many factors that could cause actual results or events to differ materially from current expectations. The most significant factors that Bell Aliant has identified that may affect Bell Aliant's financial results or events in 2014 include but are not limited to: increasing competition; cost management; financing and free cash flow; network evolution; pension valuation and investment risk; legislative and regulatory factors; outsourcing and vendor relationships; information technology; human capital; as well as the structural subordination of our common shares; limitations on non-resident ownership; dilution, unpredictability and volatility of our share price; 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, 2013, and the "2014 outlook and assumptions" and "Risks that could affect our business and results" sections of Bell Aliant Regional Communications Inc.'s MD&A for the year ended December 31, 2013, as updated by their 2014 quarterly MD&As, as well as the "Risk Factors" sections of Bell Aliant Inc.'s and Bell Aliant Regional Communication Inc.'s 2013 Annual Information Forms. These documents are available at www.bellaliant.ca and www.sedar.com. In addition, BCE's obligation to make and complete the offer to acquire Bell Aliant common shares and preferred shares of Bell Aliant Preferred Equity Inc. is subject to a number of conditions set forth in the support agreement for the transaction.

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 of the forward-looking information reflected in this press 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 Aliant.

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 2014 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 fibre-to-the-home (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.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that G2G3 will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based on a collective appreciation for user experience, design, and technology, G2G3 is uniquely qualified and motivated to redefine how organizations and people engage in an increasingly digital world.
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is designed for their business. In 2015, organizations such as United Airlines, Sony...
The Internet of Things is in the early stages of mainstream deployment but it promises to unlock value and rapidly transform how organizations manage, operationalize, and monetize their assets. IoT is a complex structure of hardware, sensors, applications, analytics and devices that need to be able to communicate geographically and across all functions. Once the data is collected from numerous endpoints, the challenge then becomes converting it into actionable insight.
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Trel...
Amazon and Google have built software-defined data centers (SDDCs) that deliver massively scalable services with great efficiency. Yet, building SDDCs has proven to be a near impossibility for ‘normal’ companies without hyper-scale resources. In his session at 17th Cloud Expo, David Cauthron, founder and chief executive officer of Nimboxx, will discuss the evolution of virtualization (hardware, application, memory, storage) and how commodity / open source hyper converged infrastructure (HCI) so...
In their Live Hack” presentation at 17th Cloud Expo, Stephen Coty and Paul Fletcher, Chief Security Evangelists at Alert Logic, will provide the audience with a chance to see a live demonstration of the common tools cyber attackers use to attack cloud and traditional IT systems. This “Live Hack” uses open source attack tools that are free and available for download by anybody. Attendees will learn where to find and how to operate these tools for the purpose of testing their own IT infrastructu...
The web app is agile. The REST API is agile. The testing and planning are agile. But alas, data infrastructures certainly are not. Once an application matures, changing the shape or indexing scheme of data often forces at best a top down planning exercise and at worst includes schema changes that force downtime. The time has come for a new approach that fundamentally advances the agility of distributed data infrastructures. Come learn about a new solution to the problems faced by software organ...
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...
IBM’s Blue Box Cloud, powered by OpenStack, is now available in any of IBM’s globally integrated cloud data centers running SoftLayer infrastructure. Less than 90 days after its acquisition of Blue Box, IBM has integrated its Blue Box Cloud Dedicated private-cloud-as-a-service into its broader portfolio of OpenStack® based solutions. The announcement, made today at the OpenStack Silicon Valley event, further highlights IBM’s continued support to deliver OpenStack solutions across all cloud depl...
Red Hat is investing in Tesora, the number one contributor to OpenStack Trove Database as a Service (DBaaS) also ranked among the top 20 companies contributing to OpenStack overall. Tesora, the company bringing OpenStack Trove Database as a Service (DBaaS) to the enterprise, has announced that Red Hat and others have invested in the company as a part of Tesora's latest funding round. The funding agreement expands on the ongoing collaboration between Tesora and Red Hat, which dates back to Febr...
With the proliferation of connected devices underpinning new Internet of Things systems, Brandon Schulz, Director of Luxoft IoT – Retail, will be looking at the transformation of the retail customer experience in brick and mortar stores in his session at @ThingsExpo. Questions he will address include: Will beacons drop to the wayside like QR codes, or be a proximity-based profit driver? How will the customer experience change in stores of all types when everything can be instrumented and a...
The Internet of Things (IoT) is about the digitization of physical assets including sensors, devices, machines, gateways, and the network. It creates possibilities for significant value creation and new revenue generating business models via data democratization and ubiquitous analytics across IoT networks. The explosion of data in all forms in IoT requires a more robust and broader lens in order to enable smarter timely actions and better outcomes. Business operations become the key driver of I...