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The table below is a summary of the flow of cash into and out of BCE in 2004 and 2003. 

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## Cash from Operating Activities 

Cash from operating activities decreased 7.5% or $449 million to $5,519 million in 2004, compared to 2003. This was mainly a result of less favourable changes in working capital that were mostly due to: 

• one-time cash tax refunds of $440 million that were received in 2003 

• an increase of $129 million in restructuring pay- ments in 2004 relating to the employee departure program at Bell Canada. 

These were partly offset by: 

• improved operating performance in 2004 as a result of higher EBITDA and lower interest costs 

• a $75 million settlement payment received from MTS in the third quarter of 2004. 

## Capital Expenditures 

We continue to make investments to expand and update our networks and to meet customer demand for new services. Capital expenditures were $3,364 mil- lion in 2004, or 17.5% of revenues. This was 6.2% or $197 million higher than capital expenditures of $3,167 million, or 16.9% of revenues, in 2003. The increase reflects a mix of: 

• higher spending in the growth areas of the business, such as the migration to one national IP-MPLS network, our VDSL deployment and DSL footprint expansion strategies, and productivity enhancement initiatives 

• higher spending for construction of Telesat’s new satellites 

• lower spending in the legacy areas. 

Bell Canada’s capital expenditures accounted for 90% of our consolidated capital expenditures in 2004. Bell Canada’s consolidated capital intensity ratio increased to 18.0% in 2004, compared to 17.4% in 2003. 

In 2005, we are targeting a slightly higher capital intensity ratio at Bell Canada to support our continued investments in our key strategic priorities of enhancing the customer experience, reliable bandwidth and next- generation services. See Our Strategic Priorities . 

## Other Investing Activities 

Cash from other investing activities totalled $124 mil- lion in 2004. This included $179 million of insurance proceeds that Telesat received for a progressive power failure on the Anik F1 satellite. 

Cash from other investing activities of $62 million in 2003 included: 

• $83 million of proceeds from the settlement of dividend rate swaps. These swaps hedged dividend payments on some of BCE Inc.’s preferred shares. 

• $68 million of insurance proceeds that Telesat and Bell ExpressVu received for a malfunction on the Nimiq 2 satellite. 

Other items relate to changes in long-term notes receiv- able and payments by Bell Globemedia relating to CRTC benefits owing on previous business combinations. 

## Cash Dividends Paid on Common Shares 

We paid a dividend of $1.20 per common share in 2004, which is the same as the dividend we paid in 2003. 

We realized a cash benefit of $73 million in 2003 because we issued shares from treasury to fund BCE Inc.’s dividend reinvestment plan instead of buying shares on the open market. Effective the first quarter of 2004, we started buying all of the shares needed for the dividend reinvestment plan on the open market to avoid dilution. This removed the possibility of any fur- ther cash benefits through issuing shares from treasury. 

