CIBC Whistler Institutional Investor Conference

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CIBC Whistler InstitutionalInvestor Conference

• Robert McFarlane
• EVP Chief Financial Officer
• February 27, 2003

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Forward-Looking Legal Disclaimer
This presentation contains forward-looking
statements about expected future events and
financial and operating results that are subject
to risks and uncertainties. TELUS actual
results, performance, or achievement could differ
materially from those expressed or implied by
such statements. For additional information on
potential risk factors, see TELUS Annual
Information Form, and other filings with
securities commissions in Canada and the United
States. TELUS disclaims any intention or
obligation to update or revise any
forward-looking statements, whether as a result
of new information, future events or
otherwise. All dollars in C unless otherwise
specified.
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Agenda

• About TELUS
• Q4 2002 review
• 2002 Performance vs. Targets
• 2003 Outlook

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About TELUS

• Canadas only national pure-play,
  facilities-based, full-service telecom provider
• 2nd largest Canadian telco
• Executing national growth strategy focused on
  data, IP wireless from position of financial
  strength
• 2002 Revenues C7.0B
• EBITDA C2.52B
• Operating segments Communications wireline
• Mobility wireless
• Enterprise value C14B (equity 6B)
• Daily trading1 1.1M shares

1 recent 3 month average
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About TELUS Communications
ILEC full service in W. Canada and E. Quebec
Non-ILEC data IP for business in C.
Canada Revenue (2002) 5.0B EBITDA
(2002) 2.0B POPs covered 7.5M Network Access
Lines 4.9M Local/LD Market Share 97/78 Total
Internet Subscribers 802K (410K High-speed
ADSL) Fibre IP backbone national Strategic
alliance Verizon Communications
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About TELUS Mobility
Leading national wireless provider
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Q4 2002 review
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2002 Highlights Consolidated

• Difficult telecom environment price cap impact
• Met or exceeded key financial targets on Street
  
• EBITDA before restructuring costs was flat YoY as
  Mobility, OEP1 ITCs2 offset regulatory impacts
• Capex reduction drove significant improvement in
  cash flow

1 Operational Efficiency Program
2 Investment Tax Credits
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Q4 Review - Consolidated
Negative impact of regulatory decisions
masks underlying growth in Revenue EBITDA of 2
20
1 2002 normalized for regulatory impacts
(contribution and price cap decisions)
2 Excludes restructuring workforce reduction
costs
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Q4 Review - Consolidated Normalized EBITDA Trend1
(M)
? 20
1 2002 has been normalized for regulatory impacts
(contribution and price cap decisions)
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Q4 Review - Consolidated
EPS from continuing operations exhibiting
significant upward growth

• 1 Restructuring workforce reduction costs
• 2 Gain on sale of Directory Operations
• 3 Normalized for after-tax restructuring costs

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Q4 Review - Consolidated
Significant reduction in capex drove strong
improvement in capital intensity dramatic cash
generation increase
1 Ratio of capex to total revenues
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Q4 Review - Consolidated Capex Intensity1
Significant downward trend in capex intensity
ratio
2002
2001
2001
2002
Q4
YTD
1 Ratio of capex to total revenues
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Consolidated Free Cash Flow
(M)
2002
2001
Dramatic increase in YoY Free Cash Flow1 in
2002
1 EBITDA less capex, cash interest, cash taxes,
and cash dividends
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Deleveraging
New December 2004 debt EBITDA target lt 2.7x
Expect significant leverage drop in 2003/2004 due
to increased EBITDA and FCF
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TELUS Public Debt Performance
Relative Price Performance TELUS Corporation C
7.5 2006 v GOC 8.75 2005 (Assuming 100
invested on May 24, 2001)
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Communications Segment
Slide 17
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2002 Highlights Communications Segment

• Significant negative regulatory impacts
• Revenue shortfall offset by OEP progress ahead of
  plan favourable ITC1 settlement
• Data growth - 16 reported, 9.7 organic
• Gained considerable market share in ADSL
• Disciplined 23 annual reduction in capex
• Significantly improved cash flow

1 Investment Tax Credits
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Q4 Review Communications
Underlying EBITDA growth cash generation
improved 11 and 44, respectively from
efficiency improvements
1 Excludes intersegment revenues 2 Ratio of capex
to total revenues
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Q4 Review CommunicationsNetwork Access Lines
(NALs)
NAL Decrease (Q4-02 vs. Q4-01)
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(1.1)
(1.1)
Canadian NAL losses below U.S. peer averages
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(3.8)
1 Weighted average calculation 2 Comprised of
Bell South, SBC Communications, and Verizon
weighted average calculation
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Q4 Review Communications
43K ADSL net adds in Q4 to total 195K for the
year 91 YoY growth in subscriber base
195
431 in Q4
131
58 in Q4
58
20 in Q4
2002
2001
2000
Velocity ADSL Internet Net Adds (000's)
1 Q4 net adds were net of an approximate 3,400
subscriber count adjustment
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Central Canada 2002 Performance
Central Canada Wireline (ILEC Non-ILEC)
840
632
Significant scale increasing profitability
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(9)
EBITDA (M)
Revenue (M)
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Q4 Review CommunicationsNon-ILEC1,2
(M)
2002 YoY improvement of 192M in revenue 38M
in EBITDA
1 Minor adjustments were made in Q3-02 to reflect
current customer account classification 2 Note
2002 YTD Non-ILEC revenues 527.3M and 2002 YTD
EBITDA (107.2)M
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TELUS Québec Feb. 25 Announcement

• TELUS Québec Government of Québec announced
  500M investment job creation program
• On strategy and in current capex program
• In recognition of investment, Quebec to provide
  employment subsidies
• Half of new jobs to be created in large urban
  areas
• Expected benefits - 90M under 3 govt. programs
• Raises TELUS profile with Government of Québec

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Q4 Review Communications OEP Employee
Reductions
6,500

• 2002 reductions ahead of plan

1 Excludes the impacts of staff increases
associated with acquisitions during H2-2001
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Q4 Review Communications OEP Savings
Expenses
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Improving Efficiency Consolidated Revenue
EBITDA per Employee1
(thousands)
1 Based on total employees at year-end
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Mobility Segment
Slide 28
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2002 HighlightsMobility Segment

• Successful completion of integration (incl.
  billing conversions)
• 2002 net adds flat YoY despite significant
  industry slowdown
• Financial and operating results ahead of plan and
  street expectations

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Q4 Review Mobility
Flat expenses, strong network revenue growth
reduced capex drove cash flow improvement
1 Ratio of capex to total revenues
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Q4 Review Mobility

20 ARPU premium to competitors maintained
Material improvement in churn rate


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2002 net additions of 418K flat with 2001 -
represents increased share of industry net
additions
Increased Share of Net Additions
2001
2002E
TELUS Mobility 22
TELUS Mobility 33
1.9M
1.25M

• Total Canadian wireless industry estimates.
  Source Company analyst reports

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Strong service revenue market share despite lower
number of subscribers
Share of Service Revenues
Market Share of Subscribers
Market Share of Service Revenues
TELUS Mobility 25
TELUS Mobility 29
12.0M
6.4B

• Total Canadian wireless industry estimates.
  Source Company analyst reports

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2002 Review MobilityHow far we have come in 2
years
Subscriber base up 39 Industry-leading value per
subscriber has increased
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2002 Review MobilityHow far we have come in 2
years
Tripling of EBITDA and capex reduction drove a
435M improvement in annual cash flow
1 Ratio of capex to total revenues
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2002 Performance vs. Targets
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2002 Consolidated Financial Targets Original
Public Targets vs. Actuals
Achieved profitability and cash flow targets
despite revenue shortfall
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2003 Outlook
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2003 Priorities

• Driving wireline operational efficiency
• Delivering significant wireless cash flow growth
  
• Strengthening financial position
• Improving Central Canada profitability
• Reaching collective agreement

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2003 Consolidated Targets
Expect significant profitability cash flow
growth
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2003 OutlookLeading North American Telecom
Performance
Projected EBITDA Growth Rates 2003E
EBITDA target growth top echelon for N.A.
telecoms
Note TELUS data based on 2002 actual results
average of 2003 targets Other 2003 estimates
provided by TD Securities, based on analysts
estimates
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2003 OutlookLeading North American Telecom
Performance
Projected EBITDA-Capex Growth Rates 2003E
Cash Flow (EBITDA Capex) up 400 to 500M
Note TELUS data based on 2002 actual results
average of 2003 targets Other 2003 estimates
provided by TD Securities, based on analysts
estimates
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Summary

• TELUS Mobility outstanding results
• TELUS Communications better than expected
  progress on OEP
• Capex intensity significantly reducing as planned
• FCF positive in H2-02 2003
• Expect significant leverage drop in 2003/4
• 2003 EPS up by 1.10 to 1.30, to 35 to 55 cents

Executing to plan
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• Questions?
• Answers!

Slide 44
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Appendix2002 Consolidated Free Cash Flow
1 Before restructuring and workforce reduction
costs 2 Including sale of accounts receivable
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Appendix Consolidated Free Cash Flow H2-2002
1 Before restructuring workforce reduction costs
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Investor Relations

• 1-800-667-4871
• www.telus.com
• ir_at_telus.com