CIBC World Markets The Communication Food Chain

1
CIBC World MarketsThe Communication Food Chain
Robert McFarlane Executive Vice President Chief
Financial Officer New York 11 June 2001
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Forward Looking Legal Disclaimer
This presentation contains statements about
expected future events and financial results that
are forward-looking and subject to risks and
uncertainties. TELUS actual results could
differ materially from those expressed or implied
by such statements. Such statements are qualified
in their entirety by the inherent risks and
uncertainties surrounding future expectations and
may not reflect the potential impact of any
future acquisitions, mergers or divestitures.
Factors that could cause actual results to differ
materially include but are not limited to
general business and economic conditions in
Canada and in TELUS service territories
competition in wireline and wireless services,
including voice, data and Internet services, and
within the Canadian telecommunications industry
generally corporate restructurings and
successful integration of wireless operations
adverse regulatory action taxation collective
agreement negotiations technological advances
the effect of health and safety concerns and
other risk factors described in TELUS
comprehensive public disclosure documents,
including the Annual Information Form for 2000,
and in 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.
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About TELUS

• A leading Canadian full service telecom provider
• Merger of 2 ILECs
• BC TELECOM and TELUS (Alberta) in 1999
• Major acquisitions in 2000
• 584M for 70 of ILEC TELUS Québec
• 4.1B (50/50 cash/shares) plus debt for 100 of
  national wireless operator Clearnet
• Reinvest cash flow from stable ILEC business into
  data, IP wireless

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About TELUS

• Met or exceeded 2000 targets
• Assets 17.9B ? 129
• Revenues 6.4B ? 10
• EBITDA 2.5B ? 6
• Listings TSE T, T.A, NYSE TU
• Average daily trading volume - 946K
• Fully diluted equity market cap. approx. 10
  billion

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TELUS Market Position

• Canadas 2nd largest telecom representing 22 of
  32B market

Rest of market
7.0B1
TELUS
1 TELUS pro forma revenues year-ended
2000 Source Company reports, TELUS estimates
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Current TELUS Overview
2000 operating results by segment

EBITDA
REVENUE
12
20
80
88
TELUS Mobility
TELUS Communications
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Strategic Partnership with Verizon/Genuity

• Verizon is a 22 owner of TELUS
• Verizons partnership with TELUS includes
• Strategic marketing and technology agreement
• Opportunity to leverage services, applications,
  technology and purchasing power
• Genuitys partnership with TELUS includes
• Similar strategic marketing and technology
  agreement
• Opportunity to leverage tier 1 Internet
  connectivity and technology including hosting and
  Voice over IP (VoIP)

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Business Environment
Healthy national economy particularly in ILEC
markets
2001E GDP ( growth)
4.8
2.9
2.4
2.2
2.2
2.0
BC
AB
ON
QUE
CDA
USA
Source Canadian Provinces, Conference Bd. of
Cda. April 2001 US Cda 2001
consensus of forecasts
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Strategic Imperatives

• Offer integrated customer solutions
• Build national capabilities
• Partner, acquire divest as appropriate
• Focus on data, IP wireless growth markets
• Provide solutions as a united team under one
  brand
• Invest in internal capabilities

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Building National Capabilities

• Investing gt40 of 2001 capital outside the West
• Achieved national wireless network through
  Clearnet
• Leveraging TELUS Québec to spearhead expansion
• Lit cross-Canada IP backbone network on March 27

Edmonton
Quebec
Vancouver
Winnipeg
Ottawa
Calgary
Toronto
Montreal
Victoria
Seattle
Albany
Chicago
Buffalo
Detroit
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Expanding National Capabilities
Significant increase in national revenues
253M
107M
37M
1M
Q2
Q4
Q1
Q3
2000
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Partnering, Acquiring Divesting

• Partner
• TELUS terminating all Verizon northbound LD
  traffic
• Genuity directing VoIP traffic to TELUS

• Acquire
• Clearnet catapulted TELUS to national wireless
  leadership
• Executing series of smaller data IP acquisitions

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Acquisitions in 2001
Executing data/Internet acquisition program

• Status
• Northwest Digital Systems Inc. Closed
• Columbus Group Closed
• Williams Communications Canada Closed
• Daedalian eSolutions Inc. Announced
• Arqana Technologies Announced
• PSINet Inc. (Canada) Announced

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Divesting Non-Core Assets to Fund Growth
1,038M

• Real Estate Sales
• Nov 00 97M
• Jan 01 108M
• Apr 01 120M
• Total 325M
• TELUS Advertising Services
• May 01 810M
• Telecom Leasing Canada

900M-1B
2001 Goal
2001-YTD Actual
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Focus on Data, IP Wireless

• Investing 70 of 2001 capital for growth
• 650-700M wireless capital budget1
• Launching 2 Internet hosting centres in 2001
• Toronto
• Calgary
• Leading ISP in Western ILEC territories
• 2nd largest in Canada
• 500M program to extend high-speed Internet in
  Alberta BC

1 Does not include 356M for wireless spectrum
licenses
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Focus on Data, IP and Wireless
Wireless and Data driving 21 consolidated growth
Q1 2001
Q1 2000
Mobility
Voice (Local LD)
Voice (Local LD)
25
Mobility
17
58
50
14
15
Data
11
10
Data
Other
Other
1.8B
1.5B
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Investing in Our People
Creating a performance culture

• Employee Share Plan - 74 participation rate
• Stock options - universal program launched March
  2001

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TELUS Communications Segment
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New TELUS Communications
Reorganized into market facing structure
Consumer Solutions High-speed Internet, voice
and entertainment services in B.C. and
Alberta Business Solutions Data, IP, voice
and advertising services solutions for
national businesses Client Solutions
Customized voice, data/IP, Information
Technology (IT) and e-business solutions
for corporate and public sector Québec
Data, Internet, voice, and directory
publishing services offered in
Québec Global Trading Services for wholesale
clients Partner Solutions
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TELUS Communications Segment
2000 wireline revenues by product
Voice - LD22
Data18
Voice - Local 47
Other13
Total 5.1B
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TELUS Communications Segment

• Strong position in ILEC markets drives financial
  strength

ILEC Total1 Pops
Covered 7.5M Network Access Lines 4.9M LD
Wireline Market Share 78 Local Wireline Market
Share 98 Internet Subscribers 540K
1 As at period end Mar. 31, 2001
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TELUS Communications Segment
Network access lines
000s
4,944
4-year CAGR of 4
4,551
4,495
4,367
4,198
1996
1997
1998
1999
2000
4-year CAGR of 69
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TELUS Communications - 2000 Highlights

• Pro YOY YOY
• Forma1 Change Reported Change
• Operating
• Revenues 5.3B ? 1.5 5.1B ? 5.5
• EBITDA 2.2B2 ? 6.1 2.2B ? 10.8
• Capex 1.3B ? 16.3 1.2B ? 17.8

1 Pro forma results include 12 month results for
TELUS Québec 2 Before certain inter-segment
eliminations
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TELUS Communications - Key Business Strengths

• Strong and stable cash flow generator
• High market share in ILEC territories
• Focused, specific strategy for national expansion
• Well recognized and regarded brand

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TELUS Mobility Segment
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Canadian Wireless Industry
1Q 00 1Q 01
Population (000s) 30,573 30,872 Net Subscriber
Adds (000s) 1,560 1,933 Total Subscribers
(000s) 7,183 9,091 Penetration 23.5 29.4 Trai
ling 12 Mo. Penetration Gain 5.9
Source Company reports and TELUS estimates
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TELUS Mobility

• National facilities-based wireless provider
• Approx. 2.3M subscribers
• Largest CDMA footprint in Canada
• Operates only iDEN network in Canada
• Spectrum leadership position - up to 55 MHz
• Covers 77 of 30.9M Canadian POPs

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TELUS Mobility - 2000 Highlights

• Pro YOY YOY
• Forma1 Change Reported Change
• Operating
• Revenues 1.7B ? 25.3 1.3B ? 30.9
• EBITDA 173M2 ? 12.4 307M ? 19.0
• Capex 534M ? 2.2 223M ? 34.9

1 Pro forma results include 12 months of Clearnet
QuébecTel Mobilité 2 Before certain
inter-segment eliminations
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TELUS Mobility - Cdn. Wireless Market Leader
Strong Q1-01 results

• 22 pro forma revenue growth
• Record industry sub. growth of 101K net adds
• 57 ARPU is highest in industry by 30
• Less than 2 churn trending down
• 61 of total subs. are already digital
• Approx. 70 of digital subs. browser-capable

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TELUS Mobility Market Position
Leading share of revenues due to highest ARPU in
industry
Other7
Other9
Microcell8
Rogers ATT27
Rogers ATT28
Microcell11
TELUS131
TELUS125
Bell Mobility27
Bell Mobility27
Revenues 5.8B2,3
Subscribers 9.1M2
1 2000 Pro forma to include Clearnet QuébecTel
Mobilité 2 As at end of 1Q-01. Source, company
reports TELUS estimates 3 12 months ended March
31, 2001
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Clearnet Integration Update

• Integration proceeding smoothly with significant
  progress on
• Rebranding TELUS Mobility
• Products Services Alignment of pre-paid (mid
  April), postpaid (mid May)
• Distribution Mike and Pay Talk in TELUS Stores
• Network redeployment Western network
  infrastructure
• Roaming Rationalizing agreements in Canada US
• Billing Moving to common system (PCS in 2001
  Mike in 2002)
• Management Entire Clearnet executive team
  retained

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TELUS Mobility - Marketer of the Year

• Named Canadian Marketer of 2000 by American
  Marketing Association
• Recognizes outstanding marketing approaches
• TELUS Mobility won the award due to its
• fresh and future friendly approach to clients
• unique and lasting nature-based brand strategy
• overall success in the telecommunications market

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• Play Videos Here

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Review of 2000 Performance vs Targets
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2000 Consolidated Results

• Actual Pro Forma1
• Revenue 6.4B 7.0B
• EBITDA 2.5B 2.4B
• Capex 1.4B 1.8B
• Wireless net additions - 474K
• ADSL net additions - 57K
• Network access lines added - 93K

1 Pro formas include 12 month results for
Clearnet and TELUS Québec
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Met or Exceeded 2000 Targets

• Targets 2000 Target
• Provided Actual Met
• Revenue Growth 8-9 9.6 ?
• EBITDA Growth 4-6 5.9 ?
• Cash EPS1 2.05-2.15 2.31 ?
• Capex 1.5B 1.44B ?
• ADSL subscribers 80K 81K ?
• Merger Savings2 160-180M 199M ?

• 1 EPS before amortization of acquired intangibles
  goodwill, and tax revaluation
• 2 Cumulative 1999 2000 savings for BC TELECOM
  TELUS merger

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2001 Targets Update
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2001 TELUS Key Targets

• 
  Annual Target Q1 Status
• Revenue Growth 17 -
  19 21
• EBITDA Growth 11 -
  13 8.5
• Cash EPS 0.93 -
  1.00 0.26
• Wireless Net Adds.
  500K 100.8K
• Hi-Speed Internet Net Adds.
  95K 20.5K
• Capital Expenditures1 2.0 -
  2.2B 463M
• Refinance S-T Debt2
  6.25B 4.5B bank
• Divest Non-Core Assets2 0.9B - 1B
  228M

• 1 Not including 356M for wireless spectrum
• 2 Refinancing and divesting targets achieved
  Q2-01

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Financing Plan Recent Developments
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2001 Financing Plan

• Funding Priorities Status
• Refinance C6.25B Clearnet acquisition bridge
  facility ?
• Finance 2001 cash requirements ?
• Maintain adequate liquidity ?
• Maintain flexibility to accommodate divestitures,
  etc. ?
• Refinance Clearnet notes ?

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New Credit Facilities

• Borrower TELUS Corporation
• Underwriter The Toronto-Dominion Bank
• Amount Up to C2,500M
• Security Unsecured
• Facilities A C1,500M 3 - year revolver
• B C1,000M 364 - day extendible revolver
• Purpose A Refinance debt liquidity
• B CP backup
• Closed 30 May 2001

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Recent Notes Offerings

• Issuer TELUS Corporation
• Lead Underwriters C offering - TD Securities
• US offering - JPMorgan TD Securities
  (joint)
• Amount C1,600,000,000
• US3,300,000,000
• Ratings SP BBB Moodys Baa2
• DBRS BBB (High)
• Term C offering 5 Years
• US offering US1.3B - 6 Years
• US2.0 B- 10 Years
• Ranking Unsecured and unsubordinated
• Use of Proceeds 1. Repay short term bank debt
• 2. Refinance Clearnet notes
• 3. General corporate purposes
• Closed 30 May 2001

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Dividend Announcement
Objective is to increase participation rate in
DRIP thereby reducing cash outlay by 80-160M p.a.

• Dividend Reinvestment Plan
• 5 discount re-implemented
• Non-voting shares issued from Treasury
• Opened up to U.S. shareholders
• Effective July 1, 2001
• Verizon (largest shareholder - 22) to participate

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Summary

• 2000 financial results met or exceeded targets
• Resilient local telecom cash engine in AB, BC
  Québec
• Solid revenue growth in data, national wireless
  
• Mobility integration going well /
  industry-leading results
• Strategic partnership with Verizon Genuity
• Strong liquidity financial position
• C9.2B Note and bank deal - largest ever for Cdn.
  Corporation
• Clearnet High Yield Notes tender successful
• C1.0B divestitures target exceeded
• Strong financial position with significant
  liquidity

Future growth from position of financial strength