Robert McFarlane

1
Robert McFarlane
EVP Chief Financial Officer
4th Quarter 2002 Review February 14, 2003
2
2002 Highlights Consolidated

• Difficult telecom environment price cap impact
• Met 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
3
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
4
Q4 Review - Consolidated Normalized EBITDA Trend1
(M)
1 2002 has been normalized for regulatory impacts
(contribution and price cap decisions)
5
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
6
Q4 Review - Consolidated
Significant reduction in capex drove strong
improvement in capital intensity dramatic cash
generation increase
1 Ratio of capex to total revenues
7
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
8
Consolidated Free Cash Flow
(M)
2002
2001
Dramatic increase in YoY Free Cash Flow1
generation from efficiency initiatives
1 EBITDA less capex, cash interest, cash taxes,
and cash dividends
9
Consolidated Free Cash Flow
1 Before restructuring workforce reduction costs
10
Deleveraging
New December 2004 debt EBITDA target lt 2.7x
Expect significant leverage drop in 2003/2004 due
to increased EBITDA and FCF
11
TELUS Public Debt Performance
12
Communications Segment
Slide 33
13
2002 Highlights Communications Segment

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

1 Investment Tax Credits
14
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
15
Q4 Review CommunicationsRevenue by Product
Wireline revenue down YoY as negative regulatory
impacts worsen weak revenue growth
16
Q4 Review CommunicationsData
Organic Data Revenue (M) Growth ()
Price Caps
9.3
3.1
2.7
9.5
13.6
11.8
11.6
Organic data revenue growth 9.7 YTD
17
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
18
Q4 Review CommunicationsNetwork Access Lines
(NALs)
NAL Decrease (Q4-02 vs. Q4-01)
1
(1.1)
(1.1)
Canadian NAL losses below U.S. peer averages
2
(3.8)
1 Weighted average calculation 2 Comprised of
Bell South, SBC Communications, and Verizon
weighted average calculation
19
Q4 Review CommunicationsNon-ILEC1,2
(M)
YoY improvement in revenue EBITDA of 192M and
38M, respectively
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
20
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
21
Q4 Review Communications OEP Savings
Expenses
22
Mobility Segment
Slide 43
23
2002 HighlightsMobility Segment

• Successful completion of integration (incl.
  billing conversions)
• 2002 net adds flat YoY despite significant
  industry slowdown
• Maintained industry-leadership in ARPU
• Significant improvement in churn
• Strong revenue excellent profitability growth
• Significant reduction in capex
• Generated significant EBITDA-capex ahead of plan

24
Q4 Review Mobility
Flat YoY expenses on strong network revenue
growth reduced capex drove tremendous cash flow
improvement
1 Ratio of capex to total revenues
25
Q4 Review Mobility
418K net additions in 2002 flat YoY despite
significant industry slowdown
418
418
160 in Q4
131 in Q4
2002
2001
Wireless Net Adds (000's)
26
Q4 Review Mobility

20 ARPU premium to competitors maintained
Material improvement in churn rate


27
2002 Review MobilityHow far we have come in 2
years
Subscriber base up 39 Industry-leading value per
subscriber has increased
28
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
29
2002 Performance Outlook
30
2002 Consolidated Financial Targets Original
Public Targets vs. Actuals
Achieved profitability and cash flow targets
despite revenue shortfall
31
2003 Consolidated Targets
Expect significant profitability cash flow
growth
32
Summary

• TELUS Mobility outstanding results
• TELUS Communications better than expected
  progress on OEP
• Capex intensity significantly reduced as planned
• FCF positive in H2-02 2003
• Met consolidated 2002 profitability targets
• Expect significant leverage drop in 2003/4
• Positive outlook

Executing to plan
33
Questions?
34
Appendix2002 Consolidated Free Cash Flow
1 Before restructuring and workforce reduction
costs 2 Including sale of accounts receivable
35
Investor Relations

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