Cash Flows Net debt to capitalization ratio is a key measure we use to assess our financial condition. It shows how much net debt (debt due within one year and long-term debt, net of cash) we have in relation to our capitalization (total net debt, non-controlling interest and shareholders’ equity). $898 million of free cash flow, net cash proceeds of approximately $1 billion on our sales of MTS, YPG and Emergis, less $1.3 billion of business acquisitions, including Bell West and 360networks. This was com- plemented by an increase in shareholders’ equity, which reflects the excess of net earnings over dividends of approximately $400 million. During the year, Bell Canada reached a new four- year agreement with approximately 7,100 technicians represented by the Communications, Energy and Paper- workers Union of Canada (CEP). This agreement will expire in November 2007. Aliant reached an agreement with approximately 4,300 unionized employees represented by the Council of Atlantic Telecommunication Unions (CATU), end- ing a lengthy labour disruption. This agreement will expire in December 2007. On December 15, 2004, having achieved a solid capi- tal structure and traction on our strategic initiatives, we announced, subject to being declared by the board of directors, a 10%, or $0.12 per share, increase in our annual dividend on BCE Inc. common shares. Our net debt to total capitalization ratio improved to 42.8% at December 31, 2004, from 44.0% at Decem- ber 31, 2003. The improvement reflects a reduction  in net debt of $610 million, which was driven by  We generated free cash flow for the year totalling $898 million or $1,092 million before restructuring and other items. Compared to 2003, free cash flow was down $691 million, mainly reflecting the $449 million decline in cash from operating activities and higher capital expenditures of $197 million. Cash from operating activities decreased 7.5% or  $449 million to $5,519 million in 2004, compared to 2003. The decline resulted mainly from cash tax refunds of $440 million received in 2003 that did not recur this year, higher cash payments related to the employee departure programs and higher working capital requirements, partly offset by the receipt of $75 million from the settlement of lawsuits against MTS and Allstream Inc. (Allstream). 03 04 0 1,589 5,968 5,519 Free cash flow Cash from operating activities 898 FREE CASH FLOW Cash Flows New Labour Agreements Rewarding Shareholders Bell Canada Enterprises  2004 Annual Report 43