2005
second quarter review & conference call
August 5, 2005
Robert McFarlane
EVP & Chief Financial Officer
15
Mobility segment
financial results
Q2-04
Q2-05
Revenue
677
802
 19%
EBITDA1
286
367
 28%
78
115
 46%
208
252
 21%
($M)
Capex
Cash Flow (EBITDA less capex)
1
16
Change
Earnings before interest, taxes, depreciation and amortization
Continued strong revenue, earnings & cash flow growth
Mobility segment
profitable growth
Net additions
ARPU
Blended churn
COA per gross add
17
Q2-04
Q2-05
Change
114K
131K
$59
$61
 3.4%
1.32%
1.37%
 5 bps
$381
$342


15%
10%
Outstanding quarter with record net adds on 10%  in COA
Mobility segment
subscriber results
net additions
prepaid
postpaid
114K
131K
total wireless subscribers
4.1 M
0.7 M
prepaid
18%
postpaid
82%
Q2-04 Q2-05
18
3.4 M
Net adds & total subscribers up 15% with strong postpaid focus
Mobility segment
wireless net additions
211
(000s)
190
114
131
Q2-04 Q2-05
19
YTD YTD
Q2-04 Q2-05
Solid YTD results lead to net adds guidance increase to > 525K
Communications segment
revenue profile
Q2-04
Q2-05
Change
Voice – Local
544
543
 0.2%
Voice – Long Distance
229
229
Data
346
380
 9.9%
Other
71
65
 7.9%
$1,189
$1,217
 2.3%
($M)
Total Revenue
20
-
Best LD growth since 1999 merger plus strong data growth led to
4th straight quarter of YoY wireline growth
Communications segment
financial results
Q2-04
Q2-05
Change
Revenue
$1.19B
$1.22B
 2.3%
EBITDA1
$499M
$499M
Capex
$268M
$294M
 9.8%
Cash Flow (EBITDA less capex)
$231M
$205M
 11%
1
21
-
Earnings before interest, taxes, depreciation and amortization
EBITDA up 2% when normalized for restructuring, acquisitions,
and regulatory decisions
Communications segment
non-ILEC revenue & EBITDA
($M)
revenue
156
131
EBITDA
(14)
Q2-04 Q2-05
3.5
Q2-05
Q2-04
22
19% revenue growth and 3rd straight quarter of positive EBITDA
Communications segment
high-speed Internet subscriber growth
high-speed Internet
net additions
total Internet subscribers
990K
261K
19K
17K
dial-up
26%
high-speed
74%
Q2-04 Q2-05
23
729K
High-speed Internet base up 17% YoY in seasonally slow quarter
Communications segment
network access line results
% of network access lines lost, YoY
Q2-04
Q3-04
Q4-04
Q1-05
Q2-05
-1.5%
-1.2%
-1.4%
-1.3%
-1.1%
-1.8%
24
NALs impacted by various competitive offerings, large wholesale
business account loss & ongoing wireless substitution
TELUS consolidated
financial results
Q2-04
Q2-05
Change
Revenue
$1.87B
$2.02B
 8.2%
EBITDA
$785M
$865M
 10%
$0.48
$0.53
 10%
$346M
$409M
 18%
EPS1
Capex
1
25
Including favourable impacts for tax settlements on EPS of $0.13 in Q2-04 & nil in Q2-05
Strong increases in revenue and earnings
TELUS consolidated
capital intensity
Mobility
Communications
22%
26
10%
11%
YTD
Q2-04
YTD
Q2-05
YTD
Q2-04
20%
YTD
Q2-05
Consolidated
18%
17%
YTD
YTD
Q2-04 Q2-05
Communication and consolidated capital intensity down YTD
convertible debentures & shares outstanding
 $132M or 88% of $150M convertible debentures
converted into 3.3M non-voting shares prior to
redemption
 Remaining debentures redeemed for $17.9M
 Difference between redemption value & book value
treated as expense, a pre-tax charge of approx $0.9M
 Options & warrant exercises resulted in 2.2M share
issue
 repurchased 6.5M shares under normal course issuer
bid (NCIB)
27
1.0M net reduction to 357.4M shares outstanding
share buy back update
No. of Shares
No. of Shares
%
Repurchased
Repurchased
Total
Repurchased
Q2-05
Since
Authorized
vs. Auth. Since
Inception
Common
3.0M
5.8M
14.0M
42%
Non-Voting
3.5M
7.0M
11.5M
61%
Total
6.5M
12.8M
25.5M
50%
$272M
$508M
Total cost
28
Inception
TELUS has repurchased 50% of shares permitted under NCIB
TELUS consolidated
EPS continuity
EPS reported
Provision for BCTel bond
redemption litigation, &
convertible deb. redemption
expense
Income tax settlement
EPS normalized
29
Q2-04
Q2-05
$0.48
$0.53
-
$0.03
$(0.13)
-
$0.35
$0.56
Normalized EPS increase of 21 cents, up 60%
Change

10%

60%
TELUS consolidated
free cash flow
Q2-04
Q2-05
EBITDA
$785
$865
Capex
(346)
(409)
Net Cash Interest
(286)
(275)
(9)
(1)
6
7
81
20
$230
17
(48)
(86)
$112
(36)
8
$84
$208
56
(144)
61
$181
(272)
(15)
$(106)
($M)
Cash Restructuring Payments (in excess of expense)
Non-Cash Share Based Compensation
Net Cash Tax Recovery
Free Cash Flow
Share Issuance (non-public)
Cash Dividends
Working Capital/Other
Cash avail. for debt reduction & share redemp.
Purchase of shares for cancellation (NCIB)
Redemption of Preferred Shares
Funds for redemption of debt
30 Net change in cash
2005 consolidated guidance
previous 2005
guidance1
Revenue
$7.950 to 8.050B
EBITDA3
$3.250 to 3.325B
EPS4
$1.85 to 2.05
Capex
approx. $1.4B
Free Cash Flow
$1.25 to 1.35B
1
Provided on May 4, 2005
5, 2005
3 Including ~$100M in restructuring & workforce reduction costs
4 Including favourable impacts for tax settlements of $0.15 in Q1-05
2 Updated August
31
Maintaining guidance despite TWU strike
updated 2005
guidance2
no change
questions?
2005
second quarter review
investor relations
1-800-667-4871
TELUS.com
[email protected]
32
Appendices
Summaries:
Chronology of collective bargaining events
Chronology of legal decisions
Definitions
33
Labour Relations – summary of events
 Apr 13 - Company tabled Offer to the TWU
 Apr 18 – Company declared negotiations to be at an impasse
and delivered first notice of lockout to TWU
 Apr 21 - terms and conditions of the Offer communicated to
bargaining unit team members
 Apr 25 – Company began implementing numerous soft lockout
measures
 May to July – TELUS continued escalating lockout measures;
TWU responded with overtime ban and work-to-rule campaign
 Jun 14 – TELUS provided addendum to offer, which provided
additional benefits
 Jun 22 – TWU tabled its counter proposal
34
Labour Relations - summary of events (cont’d)
 Jun 24 – TELUS rejected counter proposal
 July – TWU began rotating strike activity (“study sessions”) to
which Company normally imposed short lockouts to participants
 Jul 12 – TELUS informed TWU, it would commence
implementation of its comprehensive offer on July 22
- TWU further escalated rotating strike activity
 Jul 21 – TWU initiated full scale strike and Company
implemented contingency plan
 Jul 22 – Phase I of Company’s Offer implemented
35
Labour relations - 2005 legal ruling summary
 Feb 2 - CIRB ruled in TELUS favour and overturned its year old ruling
ordering TELUS into binding arbitration.
 Apr 22 - TWU allegations challenging TELUS’ ability to implement
lockout measures dismissed by Federal Court of Appeal (FCA)
 Apr 24 - TWU application at CIRB seeking to prevent TELUS from
implementing its lockout measures on Apr 25 dismissed
 July 21 – CIRB dismissed TWU allegations regarding improper lockout
and company communications
 July 23 – BC Court grants sweeping injunction against TWU impeding
access to Company and customer locations
 July 25 – TWU loses appeal to FCA to overturn Feb. CIRB ruling that
returned both sides into collective bargaining process
 July 27 – AB Court grants TELUS injunction on posting website images
and TWU impeding access to Company and customer locations
 July 29 – BC Court grants TELUS injunction on posting website images,
36
TWU intimidation, and blocking entrances by pickets
appendix
definitions
 EBITDA: Earnings, after restructuring and workforce
reduction costs, before interest, taxes, depreciation and
amortization
 Capital intensity: capex divided by total revenue
 Cash flow: EBITDA less capex
 Free Cash Flow: EBITDA, adding Restructuring and
workforce reduction costs, cash interest received and excess
of share compensation expense over share compensation
payments, subtracting cash interest paid, cash taxes, capital
expenditures, and cash restructuring payments
37
TELUS definitions for non-GAAP measures