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employees, about 400 had left the company by Janu- ary 1, 2005. We expect annual savings of approximately $48 million as a result of these departures. 

• other charges totalling $119 million. These consisted of future lease costs for facilities that were no longer needed, asset write-downs and other provisions. 

These charges were partly offset by income of $75 mil- lion recorded in the second quarter relating to an agreement reached between BCE Inc. and MTS to settle lawsuits. The terms of the settlement included: 

• the unwinding of various commercial agreements 

• the removal of contractual competitive restrictions effective June 30, 2004 

• the orderly disposition of our interest in MTS, which was done in September 2004 

• a premium payment to us by MTS if there is a change in control of MTS before 2006 and if there is an appreciation in MTS’ share price from the time of our divestiture to the time of any takeover transaction. 

We recorded $14 million in restructuring and other items in 2003, which included a charge of $15 million relating to a restructuring at Aliant’s subsidiary, Xwave Solutions Inc. (xwave). 

In 2003, Bell Canada recorded charges of $65 mil- lion relating to various asset write-downs and other provisions. These charges were offset by a credit of $66 million relating to the reversal of restructuring charges recorded in 2002, which were no longer neces- sary because fewer employees were terminated than expected due to an increase in the number of employees being transferred to other positions within Bell Canada. 

See Note 4 to the consolidated financial state- ments for more information on the restructuring and other items. 

## Net Earnings/Earnings per Share (EPS) 

EPS of $1.65 in 2004 was negatively impacted by net losses resulting from the after-tax restructuring and other items of $0.83 per share relating mainly to the employee departure programs at Bell Canada and Aliant. These were partly offset by: 

• net gains of $0.39 per share relating mainly to the sales of our 15.96% interest in MTS, our remaining 3.24% interest in YPG, and our 63.9% interest in Emergis. 

• an extraordinary gain of $0.07 per share relating to the acquisition of the Canadian operations of 360networks. 

Similar items in 2003 had no net impact on the reported EPS of $1.90. 

Excluding the impact of these items, EPS was $2.02 in 2004, up 6.3% or $0.12 from 2003. The increase was a result of the improvement in EBITDA and lower interest expense. These were partly offset by a higher net benefit plans cost. 

## Segmented Analysis 

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