BCE to Privatize Affiliate

Bell Aliant

Analyst Conference Call

July 23, 2014

Filed by BCE Inc.

Pursuant to Rule 425 under the Securities Act of 1933

Subject Company: Bell Aliant Inc.

Commission File Number of Bell Aliant Inc. 132-02786

2

Safe Harbour Notice

Certain statements made in this presentation are forward-looking statements. These statements include, without limitation, statements relating to the proposed acquisition by BCE Inc. (“BCE”) of all of the

issued

and

outstanding

common

shares

of

Bell

Aliant

Inc.

(“Bell

Aliant”)

that

it

does

not

already

own

(the

“Proposed

Privatization”)

and

the

proposed

exchange

of

all

of

the

issued

and

outstanding

preferred

shares

of

Bell

Aliant

Preferred

Equity

Inc.

(“Prefco”)

for

BCE

preferred

shares

(the

“Proposed

Preferred

Share

Exchange”

and,

together

with

the

Proposed

Privatization,

the

“Proposed

Transactions”),

including

satisfaction

of

the

conditions

to

the

Proposed

Transactions,

the

expected

timing

of

the

Proposed

Transactions,

certain

strategic

and

financial

benefits

(including

expected

synergies

and

free

cash

flow accretion) and operational, competitive and cost efficiencies expected to result from the Proposed Privatization, the anticipated impact of the Proposed Privatization on our 2014 financial guidance and

strategic imperatives, the expected sources of funding of the Proposed Privatization, Bell Canada’s updated net leverage ratio target range and the expected return of Bell Canada’s pro forma net leverage

ratio within the new updated target range, the nature and value of investments expected to be made in Atlantic Canada over the next  5 years, our expected liquidity position and ability to access capital

markets

following

the

Proposed

Transactions,

our

network

deployment

plans,

BCE’s

common

share

dividend

yield,

our

business

outlook,

objectives,

plans

and

strategic

priorities,

and

other

statements

that

are not historical facts. All such forward-looking statements are made pursuant to the safe harbour provisions of applicable Canadian securities laws and of the United States Private Securities Litigation

Reform

Act

of

1995.

Several

assumptions

were

made

by

BCE

in

preparing

these

forward-looking

statements

and

there

are

risks

that

actual

results

will

differ

materially

from

those

contemplated

by

our

forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward-looking statements.

The

completion

of

the

Proposed

Transactions

is

subject

to

certain

conditions

including,

in

the

case

of

the

Proposed

Privatization,

that

a

sufficient

percentage

of

common

shares

of

Bell

Aliant,

and

in

the

case

of the Proposed Preferred Share Exchange, that a sufficient  percentage of preferred shares of Prefco, are deposited by the holders thereof to BCE’s offers.  In addition, the Proposed Preferred Share

Exchange is conditional upon the successful completion of the purchase by BCE of Bell Aliant’s common shares pursuant to the Proposed Privatization.  The completion of the Proposed Transactions and

achievement

of

the

expected

strategic

and

financial

benefits

and

the

competitive,

operational

and

cost

efficiencies

are

also

subject

to

customary

closing

conditions,

termination

rights

and

other

risks

and

uncertainties including, without limitation, any required regulatory approvals or notifications. Accordingly, there can be no assurance that the Proposed Transactions will occur, or that they will occur on the

terms and conditions contemplated in this presentation. In addition, there can be no assurance that the strategic and financial benefits and the competitive, operational and cost efficiencies expected to

result from the Proposed Transactions will be fully realized. The Proposed Transactions could be modified, restructured or terminated.

The expected return of Bell Canada’s pro forma net leverage ratio within its updated policy target range assumes, in particular, growth in free cash flow as well as applying free cash flow after dividends to

reduce Bell Canada’s level of indebtedness.  Free cash flow generation is subject to the risk factors and assumptions disclosed in BCE’s 2013 annual MD&A dated March 6, 2014 (included in the BCE 2013

Annual Report) as updated in BCE’s 2014 first quarter MD&A dated May 5, 2014.  Furthermore, the value of investments expected to be made in Atlantic Canada assumes that investments will continue at

current levels.  However, there can be no assurance that such investment levels will be maintained with the result that actual investment levels could materially differ from current expectations.

For additional information on assumptions and risks underlying certain of the forward-looking statements made in this presentation, please consult BCE’s press release dated July 23, 2014 announcing the

Proposed Transactions, as well as BCE’s above-mentioned 2013 annual and 2014 first quarter MD&As, and BCE’s press release dated May 6, 2014 announcing its 2014 first quarter results, filed with the

Canadian securities regulatory authorities and with the SEC and which are also available on BCE’s website. Forward-looking statements made in this presentation represent BCE’s expectations as of July

23, 2014, and, accordingly, are subject to change after such date. Except as may be required by Canadian securities laws, we do not undertake any obligation to update or revise any forward-looking

statement,

whether

as

a

result

of

new

information,

future

events

or

otherwise.

The

terms

“EBITDA”,

“EBITDA

Margin”,

“free

cash

flow”,

“Adjusted

EPS”

and

“Net

Debt”

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.

Refer

to

the

section

“Non-GAAP

Financial

Measures”

in

BCE’s

2014

First

Quarter

MD&A

for

more

details.

Notice to U.S. Securityholders

The

exchange

offers

contemplated

by

this

presentation

are

for

the

securities

of

a

Canadian

company.

The

offers

will

be

subject

to

Canadian

disclosure

requirements

that

are

different

from

those

of

the

United

States.

Financial

statements

included

or

incorporated

by

reference

in

the

offer

documents,

if

any,

will

have

been

prepared

in

accordance

with

Canadian

accounting

standards

and

may

not

be

comparable

to

the

financial

statements

of

United

States

companies.

It

may

be

difficult

for

you

to

enforce

your

rights

and

any

claim

you

may

have

arising

under

the

federal

securities

laws,

since

BCE

is

located

in

Canada,

and

some

or

all

of

its

officers

and

directors

may

be

residents

of

Canada.

You

may

not

be

able

to

sue

a

Canadian

company

or

its

officers

or

directors

in

a

foreign

court

for

violations

of

the

U.S.

securities

laws.

It

may

be

difficult

to

compel

a

Canadian

company

and

its

affiliates

to

subject

themselves

to

a

U.S.

court’s

judgment.

You

should

be

aware

that

BCE

or

its

affiliates

may

purchase

securities

otherwise

than

under

the

planned

exchange

offers,

such

as

in

open

market

or

privately

negotiated

purchases.

This

presentation

shall

not

constitute

an

offer

to

sell

or

a

solicitation

of

an

offer

to

buy

the

securities

of

BCE,

and

shall

not

constitute

an

offer,

solicitation

or

sale

in

any

state

or

jurisdiction

in

which

such

an

offer,

solicitation

or

sale

would

be

unlawful.

BCE

will

file

a

registration

statement

with

the

Securities

and

Exchange

Commission

(the

“SEC”)

in

respect

of

the

exchange

offer

for

Bell

Aliant’s

common

shares

and

will

file

a

registration

statement

with

the

SEC

in

respect

of

the

exchange

offers

for

each

class

of

preferred

shares

of

Prefco

to

the

extent

an

exemption

from

registration

is

not

available.

This

presentation

is

not

a

substitute

for

the

registration

statement(s)

that

BCE

will

file

with

the

SEC

or

any

other

documents

that

it

may

file

with

the

SEC

or

send

to

shareholders

in

connection

with

the

proposed

transactions.

BEFORE

MAKING

ANY

DECISIONS

IN

RESPECT

OF

THE

OFFERS,

SECURITY

HOLDERS

ARE

URGED

TO

READ

THE

REGISTRATION

STATEMENT(S)

AND

ALL

OTHER

RELEVANT

DOCUMENTS

FILED

OR

THAT

WILL

BE

FILED

WITH

THE

SEC

IN

CONNECTION

WITH

THE

PROPOSED

TRANSACTIONS

AS

THEY

BECOME

AVAILABLE

BECAUSE

THEY

WILL

CONTAIN

IMPORTANT

INFORMATION

ABOUT

THE

PROPOSED

TRANSACTIONS.

You

will

be

able

to

obtain

a

free

copy

of

the

registration

statement(s),

as

well

as

other

filings

containing

information

about

BCE,

at

the

SEC’s

Internet

site

(www.sec.gov).

George Cope

President & Chief Executive Officer

BCE and Bell Canada

3

Transaction overview

•

Acquiring Bell Aliant’s public minority common shares for $3.95B or $31 per common share

•

Implied transaction multiple of ~8.3x LTM EBITDA

•

Immediately accretive to FCF per share and EPS

•

Simplifies corporate operating structure and eliminates duplicate public company costs

•

Consistent with capital markets strategy

•

CRTC and Industry Canada approvals are not required because there is no change in

control of Bell Aliant, and no transfers of wireless spectrum licences

•

Closing of transaction expected by November 30, 2014

Acquiring the public minority common shares of Atlantic

Canada’s leading communications provider

4

–

Represents 11.6% premium to Bell Aliant’s weighted-average closing share price on the TSX for the 20-day

period ending July 22, 2014

–

Bell Aliant Q3 dividend that would otherwise have been payable on October 6, 2014 not being declared 

–

Recommended unanimously by Independent Committee of Bell Aliant Board

–

~$200M in annual run-rate FCF accretion after dividends

–

Supports dividend growth model

–

Strong investment grade credit rating maintained

–

Notification under the Competition Act

Privatization of Bell Aliant enables expedited broadband

investment across Canada

Transaction supports a number of Bell’s strategic imperatives

Invest in Broadband

Networks & Services

•

FCF accretion enables accelerated broadband investment across Canada

•

Investment of $2.1B in Atlantic Canada over next 5 years

•

Improves efficiency of capital spend allocation

•

Significantly expands Bell’s FTTH and IPTV footprints

•

~70% of total households with access to fibre-based broadband services

•

Increases number of IPTV-ready homes by 1M to reach 6M by YE2014

•

Expands Bell’s FTTH footprint from 1M to ~2M homes

•

~$100M of pre-tax annual operating and capital synergies

•

Eliminates duplicate public company costs, increasing productivity

•

Two most efficiently-run Canadian ILECs with combined wireline EBITDA

margin of 39%

Improve Customer

Service

•

Leverage Bell Aliant’s excellent service reputation and Bell’s scale to deliver

advanced next generation services and applications to customers

•

Today announced acquisition of 2 new call centres, bringing 700 jobs to Bell

Accelerate Wireless

•

Today announced next phase of national 4G LTE wireless rollout to more

than 100 additional communities across the Atlantic region

Leverage Wireline

Momentum

Achieve a Competitive

Cost Structure

5

BCE revenue mix

(1)

(1) 

Based on proportionate consolidation of Bell Aliant revenues (2014E)

Wireless

30%

Pro forma BCE revenue mix

(2)

Maintaining a high mix of growth services

(2) 

Pro forma 100% of Bell Aliant  (2014E)

Wireline

voice

18%

Wireless

31%

Wireline

Broadband

& TV

37%

Business

9%

Consumer

9%

Media

14%

Wireline

voice

20%

Wireline

Broadband

& TV

37%

Business

10%

Consumer

10%

Media

13%

~82%

Privatization of Bell Aliant maintains BCE’s revenue mix of

growth services essentially unchanged at ~80%, while

moderating pace of overall NAS decline

~80%

6

7

Building on Bell Aliant’s strong legacy in Atlantic Canada

•

$2.1B planned investment in Atlantic regions over next 5 years to enable the continued

rollout of broadband wireline and wireless for consumers and business users

•

Bell Aliant to maintain regional headquarters in Halifax with significant employee presence

•

Bell Aliant brand being maintained in Atlantic Canada

•

Significant ongoing investment

–

Fibre roll-out to continue for consumers and business customers

–

Deployment of 4G LTE wireless network to more than 100 additional communities announced today

–

Expansion of call centre footprint announced today

•

Regional telecom operations in rural Ontario and rural Québec to benefit from ongoing

investments in broadband networks, data hosting and service initiatives

BCE committed to maintaining a strong local presence and

significant investment in Bell Aliant territories

Karen Sheriff

President & Chief Executive Officer

Bell Aliant

8

9

Significant value crystallized for Bell Aliant shareholders

•

Transaction creates immediate value

–

$31 offer price represents 11.6% premium to Bell Aliant’s weighted-average closing share price on the

TSX for the 20-day period ending July 22, 2014

–

Attractive valuation multiple of ~8.3x LTM EBITDA

–

Tax-free roll-over election for taxable Canadian resident Bell Aliant shareholders

•

Enhances

long-term

value

potential

through

opportunity

to

acquire

ownership

in

BCE

–

Enables participation in superior growth potential of a company with a strong mix of growth assets

–

BCE dividend with ~5% yield with a track record of annual dividend growth

–

Attractive investment-grade credit profile underpinned by strong BCE balance sheet

•

$31 offer price at the high end of independent valuation range of $27 to $31.50 per share

–

Independent directors unanimously recommend Bell Aliant shareholders tender their shares to the offer

Transaction crystallizes attractive valuation and provides Bell

Aliant shareholders opportunity to benefit from BCE growth

Siim Vanaselja

Executive Vice-President & Chief Financial Officer

BCE and Bell Canada

10

11

•

$3.95B total value for Bell Aliant public

minority common shares

–

Represents a $410M premium to the 20-day

volume weighted average price as of July 22

–

Transaction multiple of ~8.3x LTM EBITDA

•

Aggregate consideration a combination of

cash

(25%)

and

BCE

common

equity

(75%)

–

Aggregate cash component of ~$1B

–

Fixed exchange ratio for equity component of

0.4778 of a BCE share per Bell Aliant share

Accretive transaction that supports BCE’s dividend growth model

and strategic imperatives

Key transaction details

•

Bell Aliant public minority shareholders to

receive ~61M BCE common shares

–

Bell Aliant shareholders to own ~7% of pro forma

BCE common equity

•

Bell Aliant preferred shareholders to also

be offered an exchange for BCE preferred

shares on equivalent financial terms

–

Completion of privatization not conditional upon

Preferred Equity exchange transaction

•

Transaction subject to more than 50% of

common shares held by public minority

shareholders being tendered and

notification under the Competition Act

•

Tax-free rollover election afforded to

Canadian resident Bell Aliant shareholders

Tender Offer

Election

Per Bell Aliant           

common share

Option 1*

$31 in cash

Option 2*

0.6371 of a BCE common share

Option 3

$7.75 in cash and 0.4778 of a

BCE common share

*  Subject to proration

12

Financing structure overview

Financing structure maintains strong liquidity position and

financial flexibility

Uses

Bell

Aliant

net

debt

rollover

(1)

2,888

Bell Aliant preferred shares

618

BCE equity rollover stake (100.4M shares @ $31/share)

3,112

Minority common shares (127.5M shares @ $31/share)

3,951

Total uses

10,569

Sources

Bell Aliant net debt rollover

2,888

Bell Aliant/BCE preferred share exchange

618

BCE equity stake rollover

3,112

Cash & available liquidity

988

Issuance of BCE common equity

2,963

Total funding

10,569

Estimated financing structure ($M)

•

$3.95B funding requirement for

acquisition of public minority common

shares

•

~$1B of debt to fund cash component

•

~61M BCE common shares to be issued

–

~840M post-closing BCE common shares

outstanding

(1)

Net of cash on hand

13

(1)

YE2014 estimates

(2)

Net Debt includes capital leases, 50% of preferred shares and A/R securitization

(3)

Standalone EBITDA is inclusive of Bell Aliant dividends to BCE

(4)

Net interest includes 50% of preferred share dividends and A/R securitization costs

•

Balanced transaction financing structure

•

Strong investment grade credit profile preserved

–

Significant additional debt capacity available within

current investment grade ratings category

•

Strong liquidity position

–

Liquidity in excess of $3B

–

Ease of access to capital markets

•

Increasing net leverage ratio target range to

1.75x-2.25x from 1.5x-2.0x

–

Aligned to strong investment-grade ratings and peers

–

Rating agency thresholds have also increased since

original targets were established in 2009

–

Supported by Bell’s improved business risk profile,

larger scale and strong FCF generation

–

Pro forma net leverage of ~2.55x at closing expected

to return within revised target range through growth in

FCF and applying FCF after dividends to deleveraging

–

No change to interest coverage ratio, which remains

very strong and well above target range of >7.5x

Strong investment grade credit profile maintained

Maintaining a strong credit profile with significant financial flexibility

Standalone

Pro forma

Net debt

(2)

$17.0B

~$21.2B

Net leverage

(3)

~2.35x

~2.55x

Interest coverage

8.8x

~8.1x

Bell credit profile

(1)

Bell credit metrics      Current          Revised

Net debt/Adj. EBITDA

(2), (3)

1.5x-2.0x

1.75x-2.25x

Adj.

EBITDA/Net

interest

(4)

>7.5x

No change

14

Significant free cash flow benefit

•

Run-rate annual FCF accretion after dividends

of ~$200M, excluding integration costs

•

~$100M in expected pre-tax annual synergies

•

Enables capital allocation efficiencies

•

No impact on 2014 financial guidance

–

No change to Bell revenue growth, EBITDA growth

or capital intensity

–

No change to BCE Adjusted EPS as we already

fully consolidate Bell Aliant

–

No change to BCE FCF guidance; however, with

this transaction BCE’s FCF will include 100% of Bell

Aliant’s FCF rather than just its share of Bell Aliant

dividends received

FCF accretion

(1)

($M)

Bell Aliant standalone FCF

~500

Bell Aliant dividends to Bell

~(190)

Incremental FCF acquired

~310

Synergies (after-tax)

~75

Interest on transaction financing (after tax)

~(35)

FCF accretion (before dividends)

~350

Dividends on BCE shares issued

~(150)

FCF accretion (after dividends)

~200

(1)

2015 analyst consensus estimate for Bell Aliant standalone FCF; run-rate 2015

annualized amounts for all other items.

Transaction provides significant FCF benefit, supporting

continued capital investment and dividend growth model 

15

Next steps

Mid-August

•

Mailing of Bell tender offer and Bell Aliant director circulars

2

nd

half of September

•

Tender offer expiration

•

Take-up and payment by BCE of tendered shares if more than 50% of

public minority shares tendered

•

Offer may be extended if less than 90% of shares tendered

•

Expected completion of Bell Aliant privatization if more than 90% of

public minority shares tendered

Early October

•

Mailing

of

Bell

Aliant

proxy

circular

if

more

than

50%,

but

less

than

90% of public minority shares tendered

Mid-November

•

Bell Aliant shareholder meeting to approve privatization (if necessary)

•

BCE to vote its shares, including those tendered, in favour of the

privatization of Bell Aliant

By November 30

•

Expected completion of Bell Aliant privatization transaction

* Above steps for common share offer. Similar timeline for preferred share offer.