BCE Emergis Reports Third Quarter Financial Results

Business Wire, Nov 2, 2004

The following outlines the assumptions used in the Black-Scholes option-pricing model for awards granted during the period:

For the three-month period For the nine-month period
                        ended September 30        ended September 30
                         2004         2003         2004         2003
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Dividend yield            0.0%         0.0%         0.0%         0.0%
Expected volatility      60.0%        75.0%        60.0%        75.0%
Risk-free interest rate  3.85%        3.53%        3.42%        3.88%
Expected life (years)       4            4            4            4
Weighted-average grant
 date fair value ($)
 (1)                    $1.84        $3.67        $3.03        $4.16

(1): Unadjusted for the reduction of $1.47 in the exercise price as of July 2, 2004, except for the current period. The weighted-average fair value of the reduction of $1.47 amounted to $0.27 for the 1,009,265 options granted since January 1, 2003 and still outstanding as of July 2, 2004.

The following pro forma disclosure outlines the impact had the Company used the fair value based method of accounting for awards granted in 2002 to determine the compensation cost for the Company's stock-based employee compensation plans:

For the three-month period For the nine-month period
                        ended September 30        ended September 30
                         2004         2003         2004         2003
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Net (loss) income,
 as reported
 ($ millions)            (1.5)         6.2        (38.8)        16.9
Adjustment to net income
 (loss) ($ millions)      4.0         (1.9)         1.4         (5.5)
Pro forma net income
 (loss) ($ millions)      2.5          4.3        (37.4)        11.4
Pro forma basic and
 diluted income (loss)
 per share ($)           0.02         0.04        (0.36)        0.11

3. Net income per share

The reconciliation of diluted income (loss) from continuing operations per share for the three and nine-month periods ended September 30, 2004 is presented below:

For the three-month period
                                  ended September 30, 2004

                            Net loss        Number of
                         ($ millions)          shares      Per share
                          (numerator)    (denominator)     amount ($)
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Net income (loss) from
 continuing operations
 attributable to common
 shareholders                    1.3      103,391,219           0.01
Dilutive options                                3,985
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Net income (loss) from
 continuing operations
 attributable to common
 shareholders and assumed
 conversions                     1.3      103,395,204           0.01


                                 For the nine-month period
                                 ended September 30, 2004

                            Net loss        Number of
                         ($ millions)          shares      Per share
                          (numerator)    (denominator)     amount ($)
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Net income (loss) from
 continuing operations
 attributable to common
 shareholders                  (45.7)     103,311,015          (0.44)
Dilutive options                                   (a)
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Net income (loss) from
 continuing operations
 attributable to common
 shareholders and assumed
 conversions                   (45.7)     103,311,015          (0.44)