Management’s Discussion and Analysis Total dividends paid on common shares increased 7.7% or $79 million to $1,108 million in 2004, com- pared to 2003. Debt Instruments We use a combination of short-term and long-term debt to finance our opera- tions. Our short-term debt consists mostly of bank facil- ities and notes payable under commercial paper programs. We usually pay fixed rates  of interest on our long-term debt and floating rates on our short-term debt. We did not have any significant issues or redemptions of equity instruments in 2004. In the first quarter of 2003, BCE Inc. issued 20 mil- lion Series AC preferred shares for $510 million and redeemed 14 million Series U preferred shares for  $357 million, which included a $7 million premium on redemption. We invested $1,299 million in business acquisitions in 2004. This consisted of: We made $740 million in debt repayments (net of issues) in 2004: We invested $115 million in business acquisitions in 2003. This consisted mainly of: Most of the issues were at Bell Canada, which issued $450 million in debentures, and Bell Globemedia, which issued $300 million of senior notes. We made $1.8 billion in debt repayments (net of issues) in 2003: We did not have any significant business dispositions in 2004. We also repaid $295 million of notes payable and bank advances. The issues were mainly at Bell Canada, which issued $600 million in debentures, and Bell Globemedia, which issued $300 million of senior notes. The combined debt of BCE Inc., Bell Canada and Aliant makes up 93% of our total debt portfolio. The average annual interest rate on our total debt was approximately 7.1% in 2004 and 2003. We received $55 million for business dispositions in 2003. This related to Bell Canada’s sale of its 89.9% ownership interest in Certen Inc. in the third quarter. Bell Canada received $89 million in cash, which was reduced by $34 million Certen had in cash and cash equivalents at the time of sale. On February 11, 2005, Bell Canada issued $700 mil- lion in Series M-18 Medium Term Note Debentures having a maturity date of February 15, 2017 and a fixed interest rate of 5.00%. Following the issuance, Bell Canada swapped the fixed interest rate to a float- ing rate. The net proceeds from the issuance of the debentures will be used to repay maturing short-term debt and for general corporate purposes.  In the third quarter of 2004, we sold our remaining 3.24% interest in YPG for net cash proceeds of $123 mil- lion and our 15.96% interest in MTS for net cash pro- ceeds of $584 million. In the fourth quarter of 2003, we sold a 3.66% inter- est in YPG for net cash proceeds of $135 million and Bell Globemedia sold its 14.5% interest in Artisan Entertainment Inc. for net cash proceeds of $24 million. Change in Investments Accounted for under  the Cost and Equity Methods Business Dispositions Debt Instruments Business Acquisitions • Bell Canada’s acquisition of MTS’ 40% interest in Bell West in the third quarter for $646 million • Bell Canada’s acquisition of the Canadian operations of 360networks in the fourth quarter for $293 million • our 28.9% proportionate share of the cash paid for CGI’s acquisition of AMS in the second quarter for $171 million • other business acquisitions at Bell Canada, Aliant and CGI, totalling $189 million. • Bell Canada repaid $952 million in debentures • Aliant repaid $100 million in medium-term notes • BCE Inc. redeemed all of its outstanding Series P retractable preferred shares for $351 million.  • our proportionate share of the cash paid for CGI’s acquisition of Cognicase Inc. in the first quarter • Bell Canada’s purchase of an additional 30% interest in Connexim, Limited Partnership in the fourth quar- ter, which increased its total interest to 100%. • Bell Canada repaid $1.4 billion in debentures • Bell Canada Holdings Inc. repaid $314 million of equity-settled notes • Bell Globemedia repaid $240 million of its credit facilities.  62 Bell Canada Enterprises  2004 Annual Report Equity Instruments