BCE Inc.

I'll turn the call over now to Glenn who will provide more details on our Q2 financial results. On behalf of all members of the Bell team, I'd like to thank Glenn once again and to extend my heartfelt gratitude for all your contributions, your leadership, Glenn, and your invaluable counsel in helping this great company move forward year after year. You'll be sorely missed.

Good morning everyone and thank you, Mirko, for your kind words. I'm proud and honored to have been part of such an amazing organization for 30 years. I have witnessed the transformation of this great company from a legacy telco into a tech services powerhouse, and the best is yet to come. I will be keenly watching from the sidelines as the next generation of leaders take Bell to the next level. And now, for the last time as CFO, on to the results. In what has become a hallmark for the company, another quarter of consistent and focused execution that delivered strong 3.5% consolidated revenue growth and 2.1% higher adjusted EBITDA. This was achieved despite ongoing media advertising headwinds Merkle mentioned and a step up in competitive intensity across all our consumer product lines. and a B2B sector that has not yet fully recovered from the global supply chain disruptions experienced over the past couple of years. Despite the positive EBITDA contributions from operations, net earnings in statutory EPS were down year over year due to a $377 million non-cash loss on BCE's share of an obligation to repurchase at fair value the minority interest in a joint venture equity investment. As profiled in our quarterly budget for 2023, adjusted EPS was also down this quarter, decreasing 9.2%. This was driven by an expected increase in interest expense due to higher rates, as well as higher depreciation and amortization, reflecting the rapid growth in our broadband capital assets. As for free cash flow, it was down approximately $300 million year over year, mainly on the timing of working capital, which as I mentioned last quarter, will largely reverse out by year end, and higher capex as we advance some spending earmarked for later in the year, given favorable construction conditions this past spring. In line with our internal forecast and consistent with our guidance target for 2023, we expect a much stronger free cash flow trajectory in the back half of the year, with a minimum $600 million favorable year-over-year swing coming from just capex alone. Let's turn to our Bell CTS segment on slide 8, where total revenue was up a very healthy 4.3% this quarter, a strong result that was driven by a 7% increase in residential internet revenue and a 4.4% higher wireless service revenue, which were fueled on the back of some of the best Q2 mobile phone and retail internet subscriber metrics, as Mirko mentioned, in well over 15 years. The year-over-year growth in revenue also reflected a much improved B2B performance trajectory, supported by the increased project spending by large enterprise customers, which strengthened as a result of the improvement in data equipment availability compared to the shortages that we experienced last year, as well as the financial contribution from our recent acquisition of cloud services provider, FX Innovation. The ongoing recovery in the business data equipment sales together with increased sales of higher valued mobile phones yielded a 21.5% growth in Bell CTX product revenue this quarter. The combined impact of the continued consumer strength across our wireless and residential home services together with improved business wireline results and lower year-over-year weather-related pressures drove improved EBITDA growth of 2.8% this quarter. Let's move over to Bell Media on slide 9. Against the backdrop of the ongoing ad recession in North America, Bell Media's revenue decline in Q2 was still only 1.9%. This represents a much better performance than our media peers, which is a testament to the team's strong execution, our diversified asset mix, programming strength, and the success of our digital-first media strategy. Advertising revenue was down 9% owing to a continued soft advertiser demand and spending across all traditional media platforms. This was moderated by a robust digital advertising growth of 19%. Subscriber revenue increased 3.9% year-over-year, driven by continued strong crave and sports direct-to-consumer streaming growth. Consistent with the year-over-year decline in advertising this quarter, EBITDA decreased 5.3%. Although that may appear to be a decent result under current economic conditions, we in our industry continue to be greatly impacted by a number of challenges, including operating losses across our news divisions, a prolonged advertising slump with no signs of immediate recovery, the shift of advertising revenue to foreign digital platforms, content costs, inflation and more challenging regulatory environment that is not adapted to the new realities facing media. This has required us to right-size our operating cost structure and asset portfolio to align with the expected revenue potential of our media business. Going forward, we will need to continue doing so in order to deliver for our shareholders in this unconstructive economic and regulatory environment. Let's turn to slide 10 for a brief update on our balance sheet and our liquidity position. We remain quite well positioned with more than $4.4 billion of available liquidity at the end of Q2, which is bolstered by a US $850 million public debt issuance during the quarter. Our debt maturity schedule also remains well structured with an average debt to maturity of approximately 12 years and an after-tax cost of debt that is well below prevailing interest rates at just under 3%. Moreover, we have no outstanding financing requirements for the balance of this year as all 2023 debt maturities have already been pre-financed. And with a strong pension solvency surplus of totaling $3.5 billion in free cash flow that is growing organically year over year, we have the financial strength against the current macroeconomic backdrop to execute on our strategic and capital market priorities for 2023 including the C-band spectrum auction later this year. Lastly, I wanted to highlight Bell's continued leadership in ESG financing structures with the launch of our first sustainability link derivatives this past May. This follows the announcement of our sustainable financing framework in April of 21, Bell's inaugural $500 million sustainability bond offering in May of 21, and the conversion of our $3.5 billion committed facilities to a sustainability linked loan last November. We look forward to a follow-on sustainability bond issuance in the future when the right mix and size of eligibility investments within our framework are available. Let's wrap up on slide 11. With consolidated financial results delivered in the first two quarters that are in line with budget, together with a strong projected EBITDA and free cash flow trajectories in the second half of the year, that are underpinned by our strong operating momentum across the business and our consistent, proven execution in a competitive marketplace, I am reconfirming all our guidance targets for 2023.

On that note, I'll turn the call back over to you, Thayne. Thank you, Glenn. So to keep the call as efficient as possible, please limit yourselves to one question and a brief follow-up so that we can get to as many of the questions in the queue as possible with the time we have left. However, before I hand it over to the operator, I just wanted to take the opportunity to say to Glenn what a privilege and pleasure it's been to work with you. You are a great leader and mentor, and I'm grateful for all the guidance, support, and encouragement you have provided. But above all, what I have valued most is your kindness, trust, and friendship. With that, Giselle, we're ready to take our first question.