Consolidated Statements of Operations Consolidated Statements of Deficit FOR THE YEAR ENDED DECEMBER 31  (in $ millions, except share amounts) NOTES 2004 2003 2002 Operating revenues 19,193  18,737 18,900 Operating expenses (11,629) (11,327) (11,516) Amortization expense (3,108) (3,100) (3,024) Net benefit plans (cost) credit  23 (256) (175) 33  Restructuring and other items  4 (1,224) (14) (768) Total operating expenses (16,217) (14,616) (15,275) Operating income 2,976  4,121 3,625 Other income  5 411  175 2,408 Impairment charge  6 –  – (765) Interest expense  7 (1,005) (1,105) (1,120) Pre-tax earnings from continuing operations 2,382  3,191 4,148 Income taxes  8 (710) (1,119) (1,614) Non-controlling interest (174) (201) (663) Earnings from continuing operations 1,498  1,871 1,871 Discontinued operations  9 26  (56) 536  Net earnings before extraordinary gain 1,524  1,815 2,407 Extraordinary gain  3 69  – – Net earnings 1,593  1,815 2,407 Dividends on preferred shares (70) (64) (59) Premium on redemption of preferred shares –  (7) (6) Net earnings applicable to common shares 1,523  1,744 2,342 Net earnings (loss) per common share – basic  10 Continuing operations 1.55 1.96 2.11 Discontinued operations 0.03 (0.06) 0.55 Extraordinary gain 0.07 – – Net earnings  1.65 1.90 2.66 Net earnings (loss) per common share – diluted  10 Continuing operations 1.55 1.95 2.09 Discontinued operations 0.03 (0.06) 0.53 Extraordinary gain 0.07 – – Net earnings  1.65 1.89 2.62 Dividends per common share 1.20 1.20 1.20 Average number of common shares outstanding – basic (millions) 924.6 920.3 847.9 FOR THE YEAR ENDED DECEMBER 31  (in $ millions)  NOTES 2004 2003 2002 Balance at beginning of year, as previously reported (5,830) (6,435) (7,686) Accounting policy change for asset retirement obligations  1 (7) (7) (7) Balance at beginning of year, as restated  (5,837) (6,442) (7,693) Consolidation of variable interest entity  1 – (25) – Net earnings  1,593 1,815 2,407 Dividends declared on common shares (1,110) (1,105) (1,031) Dividends declared on preferred shares (70) (64) (59) Costs relating to the issuance of common shares, net of $22 million of taxes – – (62) Premium on redemption of preferred shares  – (7) (6) Other – (9) 2 Balance at end of year (5,424) (5,837) (6,442) Bell Canada Enterprises  2004 Annual Report 83