2004 guidance update &
2005 targets
Robert McFarlane
EVP & Chief Financial Officer
December 17, 2004
forward-looking statement
This presentation and answers to questions contain forwardlooking statements about expected future events including a
normal course issuer bid, dividends 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’ 2004 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.
2
all dollars in Cdn$ unless otherwise specified
revised 2004 guidance - consolidated
previous 2004
guidance1
on-track/
updated 2004
guidance
$7.5 to 7.575B

$3.025 to 3.075B
$3.05 to 3.1B
$1.40 to 1.50
$1.50 to 1.55
Capex
approx. $1.3B

Free Cash Flow
$1.25 to 1.3B2


Revenue
EBITDA
EPS
Net Debt : EBITDA
2.2X or less
1 Previously
updated October 29, 2004.
2 See definition in December 17th, 2004 news release. Excludes US $125M from Verizon.
3
guidance changes reflect stronger profitability
outlook at TELUS Mobility
2004 TELUS Communications guidance
Revenue (external)
Non-ILEC revenue
EBITDA
Non-ILEC EBITDA
Capex
High-speed net adds
1 Previously
4
previous 2004
guidance1
on-track/
updated 2004
guidance
$4.725 to 4.775B

$525 to 550M
$545 to 555M
$1.925 to 1.95B

$(30) to (35)M
$(20) to (25)M
approx. $950M


approx. 125K
updated October 29, 2004.
Non-ILEC guidance revised upwards
revised 2004 guidance – Mobility
previous 2004
guidance1
Revenue (external)
$2.775 to 2.8B

EBITDA
$1.1 to 1.125B
 $1.125 to 1.15B
Capex
approx. $350M


Wireless net adds
1 Previously
5
on-track/
updated 2004
guidance
425 to 475K
updated October 29, 2004.
wireless EBITDA revised upwards
2004 TELUS corporate priorities
on track
6





Enhancing our leadership position in wireless

Reaching a collective agreement
Embracing continual cost efficiency



Revitalizing wireline revenue growth
on-going
Growing brand through superior customer service
Driving towards leadership position in high-speed on-going
Internet
deferred to 2005
2004 corporate priorities
Enhancing our leadership in wireless

TELUS Mobility ranked #1 throughout 20041
1. TELUS Mobility
2. Verizon Wireless
3. Nextel
1
7
Source: N. Moore Capital.
TELUS Mobility named top operator in North America
2004 corporate priorities
Growing brand value, superior customer service


Strong and consistent brand across wireline and wireless

Wireless best-in-class service levels as evidenced by low
churn
Wireline service levels substantially improved since the
end of 2003
operating at superior levels of customer service
8
2004 corporate priorities
delivering wireline operational efficiency
Operational Efficiency Program (OEP) – 2001 to 2003

Cumulative annual savings of $530 to 535M YE 2004 & onward
2004



9
Consolidated IT operations from 15 to 2 locations
Combining Business & Client Solutions
$50M in restruct. & workforce reduction costs expected
continued focus on institutionalizing cost efficiency
2004 corporate priorities
revitalizing wireline growth
consumer:
 “future friendly” home
 continued high-speed Internet growth
 Home Networking and HomeSitterTM launched

Bundling & price increases
 bundling strategy put in place to protect legacy revenues
 LD plan administrative charges increased
business:
 Geographic expansion
 Refocused on high quality, recurring, IP-based revenues in nonILEC to leverage Next Generation Network (NGN) leadership
10
recent wireline revenue performance superior to peers
2004 corporate priorities
driving towards leadership in high speed Internet
TELUS high-speed market share1
Total Internet subscribers
39%
37%
32%
Q3-02
1
11
Q3-03
In ILEC operating areas
Dial-up
High
Speed
31%
69%
Q3-04
948K
continued high speed market share growth - on track
to achieve 2004 annual target of 125K net additions
2004 corporate priorities
reaching a collective agreement


Unionized employees in West without new contract
Canada Industrial Relations Board (CIRB) required TELUS to
offer binding arbitration to union & imposed a
communications ban
 Waiting for CIRB reconsideration decision

12
CIRB separately ruled TELUS Mobility employees in East be
swept into union
2005 targets
2005 guidance considerations
 economic growth consistent with Conference Board of Cda
 no workforce disruption
 increased competitive activity from IP telephony players
 wireless industry penetration expansion of about 4% points
 $100M of restr. & workforce reduction costs ($50M in 2004)
 pension expense increase of $15 to 25M in 2005 vs. 2004
(Discount rate 6.0% vs. 6.25%, return on plan assets 7.25% vs. 7.5%)


effective tax rate of ~36% plus Large Corporations Tax
average shares outstanding of 340 to 360M depending on NCIB
 NCIB effective December 20, 2004
14
Communications
Segment
2005 Communications segment
revenue target
4.79
2003
4.725 to 4.775
2004E
4.70 to 4.75
2005E
Revenue ($B)
16
revenue flat as new sources offset by losses due to
competitive erosion & technological substitution
2005 Communications segment
EBITDA (before restructuring)
2.03
2003
1.975 to 2.00 1.95 to 2.00
2004E
2005E
EBITDA (before restructuring costs, $B)
17
EBITDA essentially flat before restructuring costs
2005 Communications segment
EBITDA target
2.00
2003
1.925 to 1.95 1.85 to 1.90
2004E
2005E
EBITDA1 ($B)
1
Includes restructuring & workforce reduction costs of $28M in 2003, and $50M and $100M in 2004E and
2005E, respectively.
18
slight decline in EBITDA reflects restructuring costs
2005 Communications segment
non-ILEC revenue target
600 to 650
555
545 to 555
2003
2004E
2005E
Revenue ($M)
19
9 to 18% non-ILEC growth in Central Canada focused on
recurring data and IP revenues in the business market
2005 Communications segment
non-ILEC EBITDA target
2002
2003
2004E
0 to 10
2005E
(29)
(107)
(20) to (25)
EBITDA ($M)
targeting positive non-ILEC EBITDA in 2005
20
2005 Communications segment
Capex target
2005 target
Capex
Capex
Intensity1
21
 $0 to 50M
$950 to 1,000M
18%
2003
1 Ratio
change
of capex to total revenues
~20%
20 to 21%
2004E
2005E
2005 Communications segment
high-speed Internet net additions target
2005E Total Internet subs.
(000s)
Net additions
Subscriber base
562
~687
~787
~100
High
Speed
~125
152
2003
22
Dial-up
2004E
2005E
> 1M
100K target reflects obtaining continuing majority
share of net adds in a maturing market
Mobility
Segment
2005 Mobility segment
revenue target
3.20 to 3.25
2.775 to 2.80
2.36
2003
2004E
2005E
Revenue ($B)
24
15 to 17% revenue growth driven by continued
strong subscriber growth & premium ARPU
2005 Mobility segment
subscriber net additions target
(000s)
Net additions
Subscriber base
3,424
4,300 to 4,350
Target
3,850 to 3,900
425 to 475K
425 to 475
net adds
418
2003
25
2004E
2005E
2005 net additions consistent with 2004
2005 Mobility segment
EBITDA target
1.35 to 1.40
1.125 to 1.15
0.82
2003
2004E
2005E
EBITDA ($B)
26
19 to 23% EBITDA growth driven by strong
revenue growth and continued cost containment
2005 Mobility segment
capex target
2005 target
Capex
Capex
intensity1
$350 to 400M
 $0 to 50M
15%
~13%
2003
1 Ratio
change
2004E
11 to 12%
2005E
of capex to total revenues
Mobility cash flow increasing by 27% to ~$1B
27
2005 Mobility segment
Operating cash flow yield
2004E1
2005E
EBITDA margin (total revenue)
~40%
42 to 43%
Capex intensity2
~13%
11 to 12%
Cash flow yield3
~28%
~31%
1
2
3
28
Based on updated December 17, 2004 guidance
Capex as % of total revenue
EBITDA less capex, as a % of total revenue
Attractive wireless cash flow yield
2005 Mobility segment
North America comparison – cash flow yield
31%
EBITDA less Capex / Total Revenue
24%
22%
19%
15%
6%
(6)%
1
Includes AT&T Wireless
Source: Morgan Stanley estimates
targeted cash flow yield of 31% in 2005 is best in class
29
2005 Mobility segment
Cash flow profile

Mobility as % of total consolidated
53%
44%
42%
37%
29%
2003
29%
2004E
EBITDA
30
2005E
2003
2004E
2005E
EBITDA less capex
Mobility expected to represent 53% of TELUS’
consolidated cash flow
TELUS
Consolidated
2005 consolidated targets – revenue & EBITDA
7.9 to 8.0
7.15
7.5 to 7.575
3.2 to 3.3
2.82
2003
2004E
Revenue ($B)
32
2005E
2003
3.05 to 3.1
2004E
2005E
EBITDA ($B)
5 to 6% revenue & 4 to 7% EBITDA growth driven
by strong wireless performance
2005 consolidated targets – EPS
1.65 to 1.85
1.50 to 1.55
0.92
2003
2004E
2005E
EPS1 ($)
1
Includes positive impacts from settlement of tax matters of approx. $0.20 in 2003, and $0.17 Sep. YTD 2004.
33
earnings growth of 8 to 21% driven by strong
wireless performance
2005 consolidated targets – EPS continuity
incremental
change
($)
1.50 to
1.55
 0.01
 0.04
1.33 to
1.38
0.12
0.05
1.65 to
to 0.07 1.85
 0.09
 0.36
to 0.45
tax
interest
EBITDA Restruct. Financing Other
growth
Costs
Costs
2004E
2004E
Settlement of tax normal.
matters
34
Normalized EPS growth of 22 to 37%
2005E
2005 consolidated targets – capex
2005 target
Capex
change
$1,300 to 1,400M
 $0 to 100M
18%
~17%
16 to 18%
2003
2004E
2005E
Capex
intensity1
1 Ratio
of capex to total revenues
capex intensity stable
35
2005 consolidated targets – free cash flow
($M)
EBITDA (after rest. & workforce reduction costs)
$3,200 to 3,300
Capital expenditures
(1,300 to 1,400)
Net cash interest paid
~(625)
Net cash income tax
(10)
Cash restructuring pmts (in excess of 2005 expense)
(35)
Add back: option & RSU expense less RSU cash paid
Free Cash Flow (per public guidance methodology)
free cash flow generation remains strong
36
2005E
20
~1,200 to 1,300
2005 consolidated targets – leverage
Long-term
Policy
2002
2003
Sept. 30
2004
Net Debt : Capital
57.1%
53.7%
49.7%
45 to 50%
Net Debt : EBITDA
3.3x
2.7x
2.2x
<2.2x
Current leverage within long-term policy
37
recent shareholder value enhancing initiatives
 Quarterly dividend  33% to 20¢ for Jan. 1, 2005
 New dividend payout ratio guideline of 45 to 55% of net
earnings

Normal Course Issuer Bid for 25.5M TELUS shares
 Effective Dec 20, 2004


38
Measures to restrict issue of TELUS shares
Verizon transaction increases liquidity
balanced approach to stakeholder interests
2005 consolidated targets summary
2005 targets
Revenue
$7.9 to 8.0B
 5 to 6%
EBITDA1
$3.2 to 3.3B
 4 to 7%
EPS
$1.65 to 1.85
 8 to 21%
Capex
$1.3 to 1.4B
 0 to 8%
Free Cash Flow
1 Includes
39
change
$1.2 to 1.3B
-
~$100M in restructuring & workforce reduction costs
2005 targets reflect solid revenue & earnings
growth
corporate priorities for 2005
 Enhance our leadership position in wireless
 Grow brand value through superior customer experience
(via leading IP services and customer care)
40


Embrace continual improvement in productivity


Accelerate performance in Central Canada
Leverage our investments in high speed Internet through
Future Friendly home services
Reach a new collective agreement that reflects competitive
industry
2005 priorities consistent with 2004
summary


2004 earnings outlook revised upwards
2005 targets reflect:
 strong revenue growth driven by Mobility
 healthy wireless & high-speed Internet subscriber
expansion
 good EBITDA growth despite increased restructuring
charges
 strong EPS growth
 continued strong cash flows & attractive FCF yield
41
questions?
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telus.com
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