RBC Whistler Conference 2003 The View from the Summit

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RBC Whistler Conference 2003The View from the
Summit

• February 19, 2003

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Executing our strategy to deliver a friendly
future

• Darren Entwistle
• Member of the TELUS team

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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

• TELUS update
• Three-year track record
• The road ahead 2003 priorities outlook

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About TELUS

• Canadas only 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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Track record of achieving public targets

• 16 of 18 financial targets
• 21 of 28 targets
• Batting average .750

Public Target Success 2000 to 2002
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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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Declining Capex Intensity1
Growth related capex largely completed
2002
2001
2001
2002
YTD Consolidated
YTD TELUS Mobility
1 Ratio of capex to total revenues
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Improving Free Cash Flow1
(M)
2002
2001
1 EBITDA less capex, cash interest, cash taxes,
and cash dividends
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Accelerated FCF Drives 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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Business Segment Highlights 2002

• TELUS Communications
• Operational Efficiency Program savings drive
  sequential increase in EBITDA margin each Quarter
• OEP savings 80M in Q4 150M in year
• Investment tax credits 90M
• TELUS Mobility
• 50 increase in EBITDA to 535M
• Maintain leading ARPU significantly lower churn

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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 30
1.9M
1.3M

• Source Company analyst reports

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Leading ARPU
Industry leader with 20 premium to closest
competitor
Average Revenue Per Unit (/month) 2002

• 1 Microcell ARPU Q3-02 YTD
• Source Company reports

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Churn Comparison Highlights Retention Focus
North American industry churn rate 2002
Monthly Churn () - 2002
1 Microcell churn is Q3-02 YTD Source Company
analyst reports
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Tracking Against our Strategic Imperatives

• Provide integrated solutions
• Build national capabilities
• Partner, acquire divest as necessary
• Focus relentlessly on growth markets
• Go to market as one team
• Invest in internal capabilities

Progress review from early 2000 to January 2003
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2 Build national capabilities
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TELUS National Infrastructure - IP Fibre
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TELUS National Infrastructure - Wireless
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TELUS National Infrastructure - Wireless
Jan 2000 Jan 2003 7M PoPs ? 24M ? 28M
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Major Expansion in Wireless Coverage
Population
Jan 2000
Jan 2003
Digital Coverage
Total Coverage
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TELUS National Infrastructure - Wireless
Jan 2000 Jan 2003 7M PoPs ? 24M ? 28M 20M
Mike ? 24M 1G ? 2G ? 3G
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Capex Spent on Strategy Core Growth
Cumulative Capex 2000 to 2002
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Creating Scale in Central Canada
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Improving Profitability in Central Canada
Outlook for Central Canada Wireline
Significant scale increasing profitability
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Central Canada - Non-ILEC1
(M)
YoY improvement in revenue EBITDA of 192M and
38M
1 Note 2002 YTD Non-ILEC revenues 527M and
2002 YTD EBITDA (107)M
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3 Partner, acquire divest
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Partnering, Acquiring Divesting

• Strategic alliance with Verizon
• TELUS part of core strategy focusing on Americas
• Software technology and L.T. relationship
  agreements
• 21 ownership
• Verizon Wireless roaming agreement

The Board appointments signify our continued
commitment to the long standing and productive
strategic alliance and investment that we have
with TELUS in Canada Ivan Seidenberg, CEO,
Verizon Communications Nov. 4, 2002

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Acquisitions Focus on Core Business
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Acquisitions Focus on Core Growth
Data/IP Cos.
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Slide 29
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Divesting Non-Core Assets

• Raised 1.3B in 2000 and 2002
• Real estate
• Telecom Leasing Canada
• Advertising services

Strengthened Balance Sheet
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4 Focus relentlessly on growth markets
2000
2002
Other
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Mobility
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Voice
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59
16
46
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Data
6B
7B
Voice exposed
Balanced with growth
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Sub Gains Drive Wireless Revenue Growth
2,996K
2,035M
974M
1,099K
2002
2002
Jan 2000
2000
Wireless Revenue
Wireless Subscribers
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Key Wireless Stats Then Now
1.95
58
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1.68
Q4-02
Q4-00
Q4-02
Q4-00
Average Revenue Per Unit (/month)
Churn rate ()
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Outstanding High-speed Internet Growth
410K
Velocity ADSL Internet Subs
26K
Jan 2000
2002
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5 Go to market as one team
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One Brand!
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6 Investing in internal capabilities

• Building a high performance culture

• Yesterday
• Fragmented culture
• Today
• Values embedded

Values Alignment
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Instilling Shareholder Mindset
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Getting our Cost Structure Right
ILEC / Wireline
25,500
20,300
Jan 2000
Jan 2003
ILEC employees ? 20
Proforma Clearnet, QuébecTel small
acquisitions
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Operational Efficiency Program Drives Savings
OEP ahead of plan
80 of planned employee reductions realized in
2002
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OEP Continues in 2003

• Complete OEP
• 1,300 additional position reductions
• Process improvement
• Product rationalization
• Asset utilization
• Bureaucracy busting

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Web Enabling TELUS and its Employees

• Jan 2000 Jan 2003
• 25 e.learning participation ? 70
• 0 e.performance ? 94
• 0 e.travel ? 96
• 0 e.pay ? 100 mgmt.

Internal Solutions
External Products
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• The road ahead
• 2003 priorities 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 Outlook

• EBITDA target growth top echelon for N.A.
  telecoms
• Cash Flow (EBITDA Capex) up 400 to 500M

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2003 OutlookLeading North American Telecom
Performance
Projected EBITDA Growth Rates 2003E
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
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 Outlook

• EBITDA target growth top echelon for N.A.
  telecoms
• Cash Flow (EBITDA Capex) up 400 to 500M
• EPS up by 1.10 to 1.30 to 35 to 55 cents
• Comparative regulatory stability
• Building value for equity and debt holders

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• Questions?
• Answers!

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Investor Relations

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