Published: 2022-08-04 00:00:00 ET

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Note 1			Corporate information

BCE is incorporated and domiciled in Canada. BCE’s head office is located at 1, Carrefour Alexander-Graham-Bell, Verdun, Québec, Canada. BCE is a telecommunications and media company providing wireless, wireline, Internet and television (TV) services to residential, business and wholesale customers in Canada. Our Bell Media segment provides conventional TV, specialty TV, pay TV, streaming services, digital media services, radio broadcasting services and out-of-home advertising services to customers in Canada.

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Note 2			Basis of presentation and significant accounting policies

These financial statements were prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), under International Accounting Standard (IAS) 34 - Interim Financial Reporting and were approved by BCE’s board of directors on August 3, 2022. These financial statements were prepared using the same basis of presentation, accounting policies and methods of computation as outlined in Note 2, Significant accounting policies in our consolidated financial statements for the year ended December 31, 2021, except as noted below.

These financial statements do not include all of the notes required in annual financial statements.

All amounts are in millions of Canadian dollars, except where noted.

Adoption of amended accounting standards

As required, we adopted the following amendments and clarifications to accounting standards issued by the IASB.

STANDARD			DESCRIPTION			IMPACT
Onerous Contracts – Cost of Fulfilling a Contract, Amendments to IAS 37 – Provisions, Contingent Liabilities and Contingent Assets			These amendments clarify which costs should be included in determining the cost of fulfilling a contract when assessing whether a contract is onerous.			These amendments were adopted effective January 1, 2022 and did not have a significant impact on our financial statements.
IFRIC Agenda Decision on Demand Deposits with Restrictions on Use arising from a Contract with a Third Party (IAS 7 – Statement of Cash Flows)			In April 2022, the International Financial Reporting Interpretations Committee (IFRIC) issued an agenda decision clarifying that an entity should present a demand deposit with restrictions on use arising from a contract with a third party as cash and cash equivalents in the statements of financial position and cash flows, unless those restrictions change the nature of the deposit such that it no longer meets the definition of cash in IAS 7.			In Q2 2022, we applied this agenda decision retrospectively to each prior period presented, the impact of which was limited to the classification of funding of $97 million received in Q1 2021 under a subsidy agreement with the Government of Québec. The application of this agenda decision resulted in the following: •an increase in Cash of $82 million with a corresponding decrease in Other current assets in the statement of financial position as at December 31, 2021 •an increase in Capital expenditures of ($3) million for the three and six months ended June 30, 2021, and ($15) million for the year ended December 31, 2021 in the statements of cash flows •an increase in Other financing activities of nil and $97 million for the three and six months ended June 30, 2021 and $97 million for the year ended December 31, 2021 in the statement of cash flows. •no impact in the statement of financial position as at January 1, 2021 as the funding was received in Q1 2021.

Future changes to accounting standards

The following amendments to standards issued by the IASB have not yet been adopted by BCE.

STANDARD			DESCRIPTION			IMPACT			EFFECTIVE DATE
Disclosure of Accounting Policies - Amendments to IAS 1 - Presentation of Financial Statements			These amendments require that entities disclose material accounting policies, as defined, instead of significant accounting policies.			We are currently assessing the impact of these amendments on the disclosure of our accounting policies.			Effective for annual reporting periods beginning on or after January 1, 2023. Early application is permitted.

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Note 3			Segmented information

Our results are reported in three segments: Bell Wireless, Bell Wireline and Bell Media. Our segments reflect how we manage our business and how we classify our operations for planning and measuring performance.

The following tables present financial information by segment for the three month periods ended June 30, 2022 and 2021.

FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2022			NOTE			BELL WIRELESS			BELL WIRELINE			BELL MEDIA			INTER- SEGMENT ELIMINA- TIONS			BCE
Operating revenues
External service revenues						1,692			2,808			733			—			5,233
Inter-segment service revenues						11			101			88			(200)			—
Operating service revenues						1,703			2,909			821			(200)			5,233
External product revenues						542			86			—			—			628
Inter-segment product revenues						1			—			—			(1)			—
Operating product revenues						543			86			—			(1)			628
Total external revenues						2,234			2,894			733			—			5,861
Total inter-segment revenues						12			101			88			(201)			—
Total operating revenues						2,246			2,995			821			(201)			5,861
Operating costs			5			(1,197)			(1,680)			(595)			201			(3,271)
Adjusted EBITDA (1)						1,049			1,315			226			—			2,590
Severance, acquisition and other costs			6															(40)
Depreciation and amortization																		(1,199)
Finance costs
Interest expense																		(269)
Net return on post-employment benefit plans			11															7
Impairment of assets			7															(106)
Other expense			8															(97)
Income taxes																		(232)
Net earnings																		654

(1) The chief operating decision maker uses primarily one measure of profit to make decisions and assess performance, being operating revenues less

operating costs.

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FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2021						NOTE			BELL WIRELESS			BELL WIRELINE			BELL MEDIA			INTER- SEGMENT ELIMINA- TIONS			BCE
Operating revenues
			External service revenues						1,569			2,805			666			—			5,040
			Inter-segment service revenues						11			86			89			(186)			—
Operating service revenues									1,580			2,891			755			(186)			5,040
			External product revenues						546			112			—			—			658
			Inter-segment product revenues						2			—			—			(2)			—
Operating product revenues									548			112			—			(2)			658
			Total external revenues						2,115			2,917			666			—			5,698
			Total inter-segment revenues						13			86			89			(188)			—
Total operating revenues									2,128			3,003			755			(188)			5,698
Operating costs						5			(1,159)			(1,710)			(541)			188			(3,222)
Adjusted EBITDA (1)									969			1,293			214			—			2,476
Severance, acquisition and other costs						6															(7)
Depreciation and amortization																					(1,153)
Finance costs
			Interest expense																		(268)
			Net interest on post-employment benefit plans			11															(5)
Impairment of assets						7															(164)
Other income						8															91
Income taxes																					(236)
Net earnings																					734

(1) The chief operating decision maker uses primarily one measure of profit to make decisions and assess performance, being operating revenues less operating costs.

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The following tables present financial information by segment for the six month periods ended June 30, 2022 and 2021.

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2022			NOTE			BELL WIRELESS			BELL WIRELINE			BELL MEDIA			INTER- SEGMENT ELIMINA- TIONS			BCE
Operating revenues
External service revenues						3,327			5,609			1,474			—			10,410
Inter-segment service revenues						22			203			172			(397)			—
Operating service revenues						3,349			5,812			1,646			(397)			10,410
External product revenues						1,105			196			—			—			1,301
Inter-segment product revenues						2			—			—			(2)			—
Operating product revenues						1,107			196			—			(2)			1,301
Total external revenues						4,432			5,805			1,474			—			11,711
Total inter-segment revenues						24			203			172			(399)			—
Total operating revenues						4,456			6,008			1,646			(399)			11,711
Operating costs			5			(2,398)			(3,326)			(1,212)			399			(6,537)
Adjusted EBITDA (1)						2,058			2,682			434			—			5,174
Severance, acquisition and other costs			6															(53)
Depreciation and amortization																		(2,350)
Finance costs
Interest expense																		(529)
Net return on post-employment benefit plans			11															25
Impairment of assets			7															(108)
Other expense			8															(4)
Income taxes																		(567)
Net earnings																		1,588

(1) The chief operating decision maker uses primarily one measure of profit to make decisions and assess performance, being operating revenues less

operating costs.

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2021						NOTE			BELL WIRELESS			BELL WIRELINE			BELL MEDIA			INTER- SEGMENT ELIMINA- TIONS			BCE
Operating revenues
			External service revenues						3,072			5,647			1,289			—			10,008
			Inter-segment service revenues						22			171			179			(372)			—
Operating service revenues									3,094			5,818			1,468			(372)			10,008
			External product revenues						1,130			266			—			—			1,396
			Inter-segment product revenues						4			—			—			(4)			—
Operating product revenues									1,134			266			—			(4)			1,396
			Total external revenues						4,202			5,913			1,289			—			11,404
			Total inter-segment revenues						26			171			179			(376)			—
Total operating revenues									4,228			6,084			1,468			(376)			11,404
Operating costs						5			(2,336)			(3,428)			(1,111)			376			(6,499)
Adjusted EBITDA (1)									1,892			2,656			357			—			4,905
Severance, acquisition and other costs						6															(96)
Depreciation and amortization																					(2,286)
Finance costs
			Interest expense																		(535)
			Net interest on post-employment benefit plans			11															(10)
Impairment of assets						7															(167)
Other income						8															99
Income taxes																					(489)
Net earnings																					1,421

(1) The chief operating decision maker uses primarily one measure of profit to make decisions and assess performance, being operating revenues less operating costs.

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Revenues by services and products

			THREE MONTHS						SIX MONTHS
FOR THE PERIOD ENDED JUNE 30			2022			2021			2022			2021
Services(1)
Wireless			1,692			1,569			3,327			3,072
Wireline data			1,974			1,944			3,927			3,909
Wireline voice			756			794			1,527			1,597
Media			733			666			1,474			1,289
Other wireline services			78			67			155			141
Total services			5,233			5,040			10,410			10,008
Products(2)
Wireless			542			546			1,105			1,130
Wireline data			73			101			172			245
Wireline equipment and other			13			11			24			21
Total products			628			658			1,301			1,396
Total operating revenues			5,861			5,698			11,711			11,404

(1) Our service revenues are generally recognized over time.

(2) Our product revenues are generally recognized at a point in time.

Note 4			Business acquisition

In February 2022, Bell acquired EBOX and other related companies, which provide Internet, telephone and television services to consumers and businesses in Québec and parts of Ontario for a total cash consideration of $153 million ($139 million net of cash acquired). The acquisition of EBOX and other related companies is expected to accelerate growth in Bell's residential and small business customers. The results of the acquired companies are included in our Bell Wireline segment.

The allocation of the purchase price includes provisional estimates and has been primarily allocated to goodwill. Goodwill arises principally from expected synergies and future growth and is not deductible for tax purposes.

Operating revenues of $18 million from EBOX are included in the consolidated income statements from the date of acquisition. The transaction did not have a significant impact on our net earnings for the six months ended June 30, 2022.

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Note 5			Operating costs

									THREE MONTHS						SIX MONTHS
FOR THE PERIOD ENDED JUNE 30						NOTE			2022			2021			2022			2021
Labour costs
			Wages, salaries and related taxes and benefits (1)						(1,085)			(1,071)			(2,125)			(2,104)
			Post-employment benefit plans service cost (net of capitalized amounts)			11			(59)			(63)			(128)			(137)
			Other labour costs (1) (2)						(247)			(258)			(484)			(504)
Less:
			Capitalized labour						283			270			543			525
Total labour costs									(1,108)			(1,122)			(2,194)			(2,220)
Cost of revenues (1) (3)									(1,694)			(1,663)			(3,422)			(3,403)
Other operating costs (1) (4)									(469)			(437)			(921)			(876)
Total operating costs									(3,271)			(3,222)			(6,537)			(6,499)

(1)We have reclassified amounts from the previous period to make them consistent with the presentation for the current period.

(2)Other labour costs include contractor and outsourcing costs.

(3)Cost of revenues includes costs of wireless devices and other equipment sold, network and content costs, and payments to other carriers.

(4)Other operating costs include marketing, advertising and sales commission costs, bad debt expense, taxes other than income taxes, information technology costs, professional service fees and rent.

Note 6			Severance, acquisition and other costs

			THREE MONTHS						SIX MONTHS
FOR THE PERIOD ENDED JUNE 30			2022			2021			2022			2021
Severance			(38)			(7)			(56)			(104)
Acquisition and other			(2)			—			3			8
Total severance, acquisition and other costs			(40)			(7)			(53)			(96)

Severance costs

Severance costs consist of charges related to involuntary and voluntary employee terminations.

Acquisition and other costs

Acquisition and other costs consist of transaction costs, such as legal and financial advisory fees, related to completed or potential acquisitions, employee severance costs related to the purchase of a business, the costs to integrate acquired companies into our operations, costs relating to litigation and regulatory decisions, when they are significant, and other costs.

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Note 7			Impairment of assets

2022

During the second quarter of 2022, we recorded an impairment charge of $106 million on right-of-use assets for certain office spaces we ceased using as part of our real estate optimization strategy as a result of our hybrid work policy.

2021

During the second quarter of 2021, we identified indicators of impairment for our Bell Media radio markets, notably a decline in advertising revenue and an increase in the discount rate resulting from the impact of the ongoing COVID-19 pandemic. Accordingly, impairment testing was required for our group of radio cash-generating units (CGUs).

Impairment charges for the three and six months ended June 30, 2021 of $164 million and $167 million, respectively, related primarily to $163 million of charges for various radio markets within our Bell Media segment. These charges included $150 million allocated to indefinite-life intangible assets for broadcast licences, and $13 million to property, plant and equipment mainly for buildings and network infrastructure and equipment. They were determined by comparing the carrying value of the CGUs to their fair value less cost of disposal. We estimated the fair value of the CGUs using both discounted cash flows and market-based valuation models, which include five-year cash flow projections derived from business plans reviewed by senior management for the period of July 1, 2021 to December 31, 2026, using a discount rate of 8.5% and a perpetuity growth rate of (2.0)% as well as market multiple data from public companies and market transactions. After impairments, the carrying value of our group of radio CGUs was $235 million.

Note 8			Other (expense) income

									THREE MONTHS						SIX MONTHS
FOR THE PERIOD ENDED JUNE 30						NOTE			2022			2021			2022			2021
Net mark-to-market (losses) gains on derivatives used to economically hedge equity settled share-based compensation plans									(81)			100			(6)			160
Equity (losses) gains from investments in associates and joint ventures
			Loss on investment						(42)			(14)			(42)			(14)
			Operations						12			(2)			3			(15)
Gains on investments									16			—			53			—
Gains (losses) on retirements and disposals of property, plant and equipment and intangible assets									2			(3)			(4)			(8)
Early debt redemption costs						10			—			—			(18)			(53)
Other									(4)			10			10			29
Total other (expense) income									(97)			91			(4)			99

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Equity (loss) gain from investments in associates and joint ventures

We recorded a loss on investment of $42 million for the three and six months ended June 30, 2022 and a loss on investment of $14 million for the three and six months ended June 30, 2021, respectively, related to equity losses on our share of an obligation to repurchase at fair value the minority interest in one of BCE's joint ventures. The obligation is marked to market each reporting period and the gain or loss on investment is recorded as equity gains or losses from investments in associates and joint ventures.

Gains on investments

In Q2 2022, we recorded a gain on investment of $14 million for the three and six months ended June 30, 2022, related to an obligation to repurchase at fair value the minority interest in one of our subsidiaries.

On March 1, 2022, we completed the previously announced sale of our wholly-owned subsidiary 6362222 Canada Inc. (Createch). We recorded cash proceeds of $54 million and a gain on sale of $39 million (before tax expense of $2 million).

Our results for the three months ended June 30, 2021 included Createch revenue of $17 million and net earnings of $1 million. Our results for the six months ended June 30, 2022 and 2021 included Createch revenue of $10 million and $34 million and net earnings of nil and $1 million respectively.

Note 9			Earnings per share

The following table shows the components used in the calculation of basic and diluted net earnings per common share for earnings attributable to common shareholders.

						THREE MONTHS						SIX MONTHS
FOR THE PERIOD ENDED JUNE 30						2022			2021			2022			2021
Net earnings attributable to common shareholders - basic						596			685			1,473			1,327
Dividends declared per common share (in dollars)						0.9200			0.8750			1.8400			1.7500
Weighted average number of common shares outstanding (in millions)
			Weighted average number of common shares outstanding - basic			911.9			905.0			911.0			904.7
			Assumed exercise of stock options (1)			0.9			0.3			0.8			0.1
Weighted average number of common shares outstanding - diluted (in millions)						912.8			905.3			911.8			904.8

(1)The calculation of the assumed exercise of stock options includes the effect of the average unrecognized future compensation cost of dilutive options. It excludes options for which the exercise price is higher than the average market value of a BCE common share. The number of excluded options was nil for the second quarter and the first half of 2022, compared to 3,337,131 for the second quarter of 2021 and 10,458,921 for the first half of 2021.

Note 10			Debt

On February 11, 2022, Bell Canada issued, under its 2016 trust indenture, 3.65% Series US-7 Notes, with a principal amount of $750 million in U.S. dollars ($954 million in Canadian dollars), which mature on August 15, 2052. The Series US-7 Notes have been hedged for foreign currency fluctuations through cross currency interest rate swaps. See Note 12, Financial assets and liabilities, for additional details.

The Series US-7 Notes are fully and unconditionally guaranteed by BCE.

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On March 16, 2022, Bell Canada redeemed, prior to maturity, its 3.35% Series M-26 medium-term note (MTN) debentures, having an outstanding principal amount of $1 billion, which were due on March 22, 2023. As a result, in Q1 2022, we recognized early debt redemption charges of $18 million, which were recorded in Other (expense) income in the consolidated income statement.

Securitization program

Subsequent to quarter end, we entered into a new securitization program which replaces our previous securitized trade receivables program and now includes wireless device financing plan receivables. As a result, the maximum amount available under our securitization program increased from $1.3 billion to $2.3 billion.

Similar to the previous program, the securitization program is recorded as a floating rate revolving loan secured by certain receivables. We continue to service trade receivables and wireless device financing plan receivables under the securitization program, which matures in July 2025 unless previously terminated. The lenders' interest in the collection of these receivables ranks ahead of our interests, which means that we are exposed to certain risks of default on the amounts securitized.

We have provided various credit enhancements in the form of overcollateralization and subordination of our retained interests. The lenders have no further claim on our other assets if customers do not pay the amounts owed.

Additionally, subsequent to quarter end, our loans secured by receivables increased from $900 million at June 30, 2022 to $1.6 billion based on a total receivable balance collateralized under the program of $3.2 billion.

Note 11			Post-employment benefit plans

Post-employment benefit plans cost

We provide pension and other benefits for most of our employees. These include defined benefit (DB) pension plans, defined contribution (DC) pension plans and other post-employment benefits (OPEBs).

COMPONENTS OF POST-EMPLOYMENT BENEFIT PLANS SERVICE COST

						THREE MONTHS						SIX MONTHS
FOR THE PERIOD ENDED JUNE 30						2022			2021			2022			2021
DB pension						(49)			(56)			(97)			(111)
DC pension						(26)			(26)			(64)			(62)
OPEBs						—			—			—			(1)
Less:
			Capitalized benefit plans cost			16			19			33			37
Total post-employment benefit plans service cost						(59)			(63)			(128)			(137)

COMPONENTS OF POST-EMPLOYMENT BENEFIT PLANS FINANCING INCOME (COST)

						THREE MONTHS						SIX MONTHS
FOR THE PERIOD ENDED JUNE 30						2022			2021			2022			2021
DB pension						16			2			42			5
OPEBs						(9)			(7)			(17)			(15)
Total net return (interest) on post-employment benefit plans						7			(5)			25			(10)

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FUNDED STATUS OF POST-EMPLOYMENT BENEFIT PLANS

The following table shows the funded status of our post-employment benefit obligations.

						FUNDED						PARTIALLY FUNDED(1)						UNFUNDED(2)						TOTAL
FOR THE PERIOD ENDED						JUNE 30, 2022			DECEMBER 31, 2021			JUNE 30, 2022			DECEMBER 31, 2021			JUNE 30, 2022			DECEMBER 31, 2021			JUNE 30, 2022			DECEMBER 31, 2021
Present value of post-   employment benefit obligations						(18,016)			(23,872)			(1,430)			(1,840)			(223)			(289)			(19,669)			(26,001)
Fair value of plan assets						23,460			27,979			407			412			—			—			23,867			28,391
Plan surplus (deficit)						5,444			4,107			(1,023)			(1,428)			(223)			(289)			4,198			2,390
Effect of asset limit						(1,217)			(652)			—			—			—			—			(1,217)			(652)
Post-employment benefit asset (liability)						4,227			3,455			(1,023)			(1,428)			(223)			(289)			2,981			1,738

(1)The partially funded plans consist of supplementary executive retirement plans (SERPs) for eligible employees and certain OPEBs. The company partially funds the SERPs through letters of credit and a retirement compensation arrangement account with the Canada Revenue Agency. Certain paid-up life insurance benefits are funded through life insurance contracts.

(2)Our unfunded plans consist of certain OPEBs, which are paid as claims are incurred.

In Q2 2022, we recorded an increase in our post-employment benefit plans and a gain, before taxes, in Other comprehensive income of $354 million due to a decrease in the present value of our post-employment benefit obligations of $2,672 million as a result of an increase in the discount rate to 5.3% at June 30, 2022, compared to 4.3% at March 31, 2022, partly offset by a decrease in the fair value of plan assets of $2,092 million as a result of a loss on plan assets of 7.2% and an increase in the effect of the asset limit of $226 million.

During the first half of 2022, we recorded an increase in our post-employment benefit plans and a gain, before taxes, in Other comprehensive income of $1,233 million due to a decrease in the present value of our post-employment benefit obligations of $6,112 million as a result of an increase in the discount rate to 5.3% at June 30, 2022, compared to 3.2% at December 31, 2021, partly offset by a decrease in the fair value of plan assets of $4,314 million as a result of a loss on plan assets of 13.8% and an increase in the effect of the asset limit of $565 million.

Note 12			Financial assets and liabilities

FAIR VALUE

The following table provides the fair value details of financial instruments measured at amortized cost in the consolidated statements of financial position.

JUNE 30, 2022

DECEMBER 31, 2021

CLASSIFICATION

FAIR VALUE METHODOLOGY

CARRYING VALUE

FAIR VALUE

CARRYING VALUE

FAIR VALUE

CRTC deferral account obligation

Trade payables and other liabilities and other non-current liabilities

Present value of estimated future cash flows discounted using observable market interest rates

56

56

66

67

Debt securities and other debt

Debt due within one year and long-term debt

Quoted market price of debt

23,734

22,072

23,729

26,354

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The following table provides the fair value details of financial instruments measured at fair value in the consolidated statements of financial position.

									FAIR VALUE
			CLASSIFICATION			CARRYING VALUE OF ASSET (LIABILITY)			QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)			OBSERVABLE MARKET DATA (LEVEL 2)(1)			NON-OBSERVABLE MARKET INPUTS (LEVEL 3)(2)
June 30, 2022
Publicly-traded and privately-held investments (3)			Other non-current assets			175			14			—			161
Derivative financial instruments			Other current assets, trade payables and other liabilities, other non-current assets and liabilities			365			—			365			—
Maple Leaf Sports & Entertainment Ltd. (MLSE) financial liability(4)			Trade payables and other liabilities			(149)			—			—			(149)
Other			Other non-current assets and liabilities			124			—			173			(49)
December 31, 2021
Publicly-traded and privately-held investments (3)			Other non-current assets			183			24			—			159
Derivative financial instruments			Other current assets, trade payables and other liabilities, other non-current assets and liabilities			279			—			279			—
MLSE financial liability(4)			Trade payables and other liabilities			(149)			—			—			(149)
Other			Other non-current assets and liabilities			122			—			185			(63)

(1)Observable market data such as equity prices, interest rates, swap rate curves and foreign currency exchange rates.

(2)Non-observable market inputs such as discounted cash flows and earnings multiples. A reasonable change in our assumptions would not result in a significant increase (decrease) to our level 3 financial instruments.

(3)Unrealized gains and losses are recorded in Other comprehensive income in the statements of comprehensive income and are reclassified from Accumulated other comprehensive income to Deficit in the statements of financial position when realized.

(4)Represents BCE’s obligation to repurchase the BCE Master Trust Fund's (Master Trust Fund) 9% interest in MLSE at a price not less than an agreed minimum price should the Master Trust Fund exercise its put option. The obligation to repurchase is marked to market each reporting period and the gain or loss is recognized in Other (expense) income in the income statements.

MARKET RISK

CURRENCY EXPOSURES

We use forward contracts, options and cross currency interest rate swaps to manage foreign currency risk related to anticipated purchases and certain foreign currency debt.

In Q1 2022, we entered into cross currency interest rate swaps with a total notional amount of $750 million in U.S. dollars ($954 million in Canadian dollars) to hedge the U.S. currency exposure of our US-7 Notes maturing in 2052. See Note 10, Debt, for additional details.

A 10% depreciation (appreciation) in the value of the Canadian dollar relative to the U.S. dollar would result in a loss of $13 million (loss of $21 million) recognized in net earnings at June 30, 2022 and a gain of $138 million (loss of $119 million) recognized in Other comprehensive income at June 30, 2022, with all other variables held constant.

A 10% depreciation (appreciation) in the value of the Canadian dollar relative to the Philippine peso would result in a gain (loss) of $6 million recognized in Other comprehensive income at June 30, 2022, with all other variables held constant.

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The following table provides further details on our outstanding foreign currency forward contracts and options as at June 30, 2022.

TYPE OF HEDGE			BUY CURRENCY			AMOUNT TO RECEIVE			SELL CURRENCY			AMOUNT TO PAY			MATURITY			HEDGED ITEM
Cash flow			USD			1,095			CAD			1,390			2022			Commercial paper
Cash flow			USD			291			CAD			370			2022			Anticipated purchases
Cash flow			PHP			1,174			CAD			28			2022			Anticipated purchases
Cash flow			PHP			2,147			CAD			50			2023			Anticipated purchases
Cash flow			USD			611			CAD			752			2023			Anticipated purchases
Cash flow			USD			254			CAD			317			2024			Anticipated purchases
Cash flow - call options			USD			100			CAD			129			2022			Anticipated purchases
Cash flow - put options			USD			100			CAD			127			2022			Anticipated purchases
Economic			USD			12			CAD			15			2022			Anticipated purchases
Economic - put options			USD			120			CAD			147			2022			Anticipated purchases
Economic - call options			USD			75			CAD			89			2022			Anticipated purchases
Economic - call options			CAD			95			USD			75			2022			Anticipated purchases
Economic - options (1)			USD			90			CAD			109			2022			Anticipated purchases
Economic - options (1)			USD			169			CAD			205			2023			Anticipated purchases
Economic - call options			USD			120			CAD			146			2024			Anticipated purchases

(1) Foreign currency options with a leverage provision and a profit cap limitation.

INTEREST RATE EXPOSURES

In Q2 2022, we sold interest rate swaptions maturing in Q3 2022 with a notional amount of $750 million for $6 million. These interest rate swaptions hedge economically the fair value of our Series M-53 MTN debentures. The fair value of these interest rate swaptions at June 30, 2022 was a liability of $9 million recognized in Trade payables and other liabilities.

In 2022, we entered into cross currency basis rate swaps maturing in 2023 with a notional amount of $540 million to hedge economically the basis rate exposure on future debt issuances. The fair value of these cross currency basis rate swaps at June 30, 2022 was a liability of $8 million recognized in Trade payables and other liabilities and Other non-current liabilities in the statements of financial position.

We use leveraged interest rate options to hedge economically the dividend rate resets on $582 million of our preferred shares which had varying reset dates in 2021 for the periods ending in 2026. The fair value of these leveraged interest rate options at June 30, 2022 and December 31, 2021 was nil and a liability of $2 million, respectively, recognized in Trade payables and other liabilities and Other non-current liabilities in the statements of financial position. A gain of $1 million and $2 million for the three and six months ended June 30, 2022, respectively, relating to these leveraged interest rate options is recognized in Other (expense) income in the income statements.

A 1% increase (decrease) in interest rates would result in a loss of $40 million and a (gain of $28 million) recognized in net earnings at June 30, 2022, with all other variables held constant.

A 0.1% increase (decrease) in cross currency basis swap rates would result in a gain (loss) of $7 million recognized in net earnings at June 30, 2022, with all other variables held constant.

EQUITY PRICE EXPOSURES

We use equity forward contracts on BCE’s common shares to hedge economically the cash flow exposure related to the settlement of equity settled share-based compensation plans. The fair value of our equity forward contracts at June 30, 2022 and December 31, 2021 was a net asset of $16 million and $130 million, respectively, recognized in Other current assets, Trade payables and other liabilities, Other non-current assets and Other non-current liabilities in the statements of financial position. A loss of $81 million and $6 million for the three and six months ended June 30, 2022, respectively, relating to these equity forward contracts is recognized in Other (expense) income in the income statements.

A 5% increase (decrease) in the market price of BCE’s common shares would result in a gain (loss) of $35 million recognized in net earnings at June 30, 2022, with all other variables held constant.

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Note 13			Share capital

Redemption of Series AO Preferred Shares

On March 31, 2022, BCE redeemed its 4,600,000 issued and outstanding Cumulative Redeemable First Preferred Shares, Series AO (Series AO Preferred Shares) with a stated capital of $118 million for a total cost of $115 million. The remaining $3 million was recorded to contributed surplus.

Note 14			Share-based payments

The following share-based payment amounts are included in the income statements as operating costs.

			THREE MONTHS						SIX MONTHS
FOR THE PERIOD ENDED JUNE 30			2022			2021			2022			2021
Employee savings plan			(6)			(8)			(14)			(16)
Restricted share units (RSUs) and performance share units (PSUs)			(21)			(13)			(46)			(33)
Other (1)			(2)			(1)			(3)			(3)
Total share-based payments			(29)			(22)			(63)			(52)

(1) Includes deferred share units and stock options.

The following tables summarize the change in outstanding RSUs/PSUs and stock options for the period ended June 30, 2022.

RSUs/PSUs

			NUMBER OF RSUs/PSUs
Outstanding, January 1, 2022			3,085,667
Granted			1,005,712
Dividends credited			79,276
Settled			(1,031,426)
Forfeited			(52,717)
Outstanding, June 30, 2022			3,086,512

STOCK OPTIONS

						NUMBER OF OPTIONS			WEIGHTED AVERAGE EXERCISE PRICE ($)
Outstanding, January 1, 2022						10,778,724			60
Exercised(1)						(2,910,716)			58
Forfeited or expired						(23,624)			65
Outstanding, June 30, 2022						7,844,384			61
Exercisable, June 30, 2022						4,581,464			58

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Note 15			Commitments

The following table is a summary of our contractual obligations at June 30, 2022 that are due in 2022 and in each of the next four years and thereafter.

						2022			2023			2024			2025			2026			THERE- AFTER			TOTAL
Commitments for property, plant and      equipment and intangible assets						826			1,377			775			559			388			1,060			4,985
Purchase obligations						318			497			385			338			399			390			2,327
Leases committed not yet commenced						7			3			6			—			—			—			16
Total						1,151			1,877			1,166			897			787			1,450			7,328

Our commitments for property, plant and equipment and intangible assets include program and feature film rights and investments to expand and update our networks to meet customer demand.

Purchase obligations consist of contractual obligations under service and product contracts for operating expenditures and other purchase obligations.

Our commitments for leases not yet commenced include OOH advertising spaces, fibre use and real estate. These leases are non-cancellable.

Subsequent to quarter end, our commitments for purchase obligations increased by approximately $1.3 billion, which are payable $28 million in 2022, $55 million in 2023, $54 million in 2024, $91 million in 2025, $164 million in 2026 and $908 million thereafter.

Note 16			COVID-19

During the second quarter of 2022, the unfavourable effects of the COVID-19 pandemic on our financial and operating performance continued to moderate due to our operational execution and easing of government restrictions during the quarter. However, due to uncertainties relating to the severity and duration of the COVID-19 pandemic and possible further resurgences in the number of COVID-19 cases, including as a result of the potential emergence of other variants, and various potential outcomes, it is difficult at this time to estimate the impacts of the COVID-19 pandemic on our business. Our business and financial results could continue to be unfavourably impacted, and could again become more significantly and negatively impacted, in future periods, including, among others, as a result of global supply chain challenges adversely affecting our wireless and wireline product revenues.