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to 2002. It determined that these amounts were the cumulative result of a series of individually immaterial events and transactions relating to its legacy accounts receivable systems dating back to the early 1990s. 

## Note 5 : Other Income 

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In 2004, net gains on investments of $319 million included: 

• a gain of $108 million from the sale of Bell Canada’s remaining 3.24% interest in YPG General Partner Inc. for net cash proceeds of $123 million 

• a gain of $217 million realized from the sale of BCE Inc.’s 15.96% interest in MTS for net cash proceeds of $584 million. On August 1, 2004, the MTS shares were transferred from Bell Canada to BCE Inc. as part of a corporate reorganization. The purpose of this reor- ganization was to ensure that capital loss carryforwards at BCE Inc. would be available to be utilized against the gain on the sale of the MTS shares. 

• other net losses on investments of $6 million. 

Net gains on investments of $76 million in 2003 were mainly from: 

• a $120 million gain from the sale of a 3.66% interest in YPG General Partner Inc. for net proceeds of $135 mil- lion in cash 

• a $44 million loss from the write-down of a number of our cost-accounted investments. 

Net gains on investments of $2,401 million in 2002 were mainly from: 

• selling the directories business ($2.3 billion) 

• selling a 37% interest in each of Télébec and NorthernTel when the Bell Nordiq Income Fund was created ($222 million) 

• writing down our cost-accounted investment in Nortel Networks Corporation (Nortel) ($98 million). 

## Note 6 : Impairment Charge 

In 2002, we completed our annual impairment test for goodwill for all of our reporting units. As a result, we recognized a charge of $765 million to pre-tax earn- ings relating to impaired goodwill of reporting units in Bell Globemedia ($715 million) and Aliant ($50 mil- lion). In each case, the goodwill was written down to its estimated fair value, which was determined based on estimates of discounted future cash flows and confirmed by market-related values. 

The main factor contributing to the impairment at Bell Globemedia was a revised estimate of future cash flows, which reflected management’s decision to scale back its trials in convergence products and other non-core businesses. Market conditions for the media business also contributed to the impairment. 

The write-down at Aliant was a result of poor market conditions in the information technology business. 

## Note 7 : Interest Expense 

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## Note 8 : Income Taxes 

The table below is a reconciliation of income tax expense at Canadian statutory rates of 34.3% in 2004, 35.4% in 2003 and 37.4% in 2002, and the amount of reported income tax expense in the statements of operations. 

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