Q1 2005 Presentation Slides

1
2005 first quarter review conference call May
5, 2005
the future is friendly
2
forward-looking statements
This presentation and answers to questions
contain forward-looking statements about expected
future events including competition, labour
relations developments 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.
all dollars in C unless otherwise specified
3
2005 first quarter review conference call May
5, 2005 Robert McFarlane EVP Chief Financial
Officer
the future is friendly
4
financial results
TELUS consolidated
Change
Q1-05
Q1-04
9.5
?
1.98B
1.80B
Revenue
19
?
856M
721M
EBITDA1
139
?
0.67
0.28
EPS2
12
?
273M
310M
Capex
?
443M
567M
28
Free Cash Flow3
1 Earnings before interest, taxes, depreciation
and amortization
2 Including favourable impacts for tax
settlements on EPS of 0.04 in Q1-04 0.15 in
Q1-05
3 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
Strong increases in revenue and profitability
5
tax normalization
TELUS consolidated

• 15 cent impact on EPS in Q1-05 versus 4 cents in
  Q1-04
• reflects change in tax estimates for available
  temporary differences, other tax adjustments, and
  related interest income on settlements

6
regulatory update
TELUS consolidated

• CDNS
• 35 of TELUS ILEC local voice revenue regulated
• Feb-05, Competitive digital network services
  (CDNS) decision
• Positive consolidated impact of 25M in 2005
• unfavourable ILEC impacts effectively offset by
  mandated price reductions accrued in deferral
  account
• expense reductions for non-ILEC Mobility
• Portable Subsidy
• TELUS Quebec benefited from decision on portable
  subsidy retroactive to 2003 2004
• positive impact of 10M in 2005

positive regulatory impacts
7
EPS continuity
TELUS consolidated
Change
Q1-05
Q1-04
139
?
0.67
0.28
EPS reported
(0.15)
(0.04)
Income tax settlement
(0.01)
-
Retroactive impacts of TQ, CDNS regulatory
decisions

?
0.51
113
EPS normalized
0.24
Normalized quarterly EPS increase of 0.27
8
free cash flow
TELUS consolidated
Q1-04
Q1-05
(M)
721
856
EBITDA
(310)
(273)
Capex
(53)
(12)
Cash Restructuring Payments (in excess of expense)
(9)
(7)
Net Cash Interest
5
4
Non-Cash Share Based Compensation
88
(1)
Net Cash Tax Recovery
443
567
Free Cash Flow
27
88
Share Issuance (non-public)
(42)
-
Cash Dividends
(150)
-
Acc. Rec. Securitization Program Reduction
(4)
(145)
Working Capital/Other
Cash avail. for debt reduction share redemp.
274
510
Net change in LTD share repurchase
(7)
(159)
Net change in cash
267
351
9
financial results
Mobility segment
Change
Q1-05
Q1-04
(M)
19
?
753
633
External Revenue
36
?
337
248
EBITDA1
19
?
60
50
Capex
41
?
278
198
Cash Flow (EBITDA less capex)
1 Earnings before interest, taxes, depreciation
and amortization
Continued strong revenue, earnings cash flow growth
10
subscriber results
Mobility segment
net additions
total wireless subscribers
4.0M
0.7M
80K
76K
prepaid 17
postpaid 83
3.3M
Q1-04
Q1-05
Continued strong postpaid mix
11
ARPU comparison
Mobility segment
Q1-04
58
57
Q1-05
48
47
46
44
TELUS Mobility
Rogers Wireless1
BCE Wireless

• Source Company reports

1 Pro forma Microcell
TELUS maintaining 20 premium to competitors
12
profitable growth strategy
Mobility segment
Change
Q1-05
Q1-04
5.4
?
80K
76K
Net additions
1.8
?
58
57
ARPU
4 bps
?
1.45
1.49
Blended churn
7.3
?
355
383
COA
Continued strong operating metrics
13
TELUS achieving profitable subscriber growth
Mobility segment
Canadian national wireless carriers in Q1-05
net adds
EBITDA
cash flow1
TELUS Mobility
TELUS Mobility
TELUS Mobility
TELUS Mobility
TELUS Mobility
44
40
36
44
40
936M
182K
693M
1 EBITDA - Capex
Source Company reports. Sum of reported results
for BCE, Rogers Wireless pro forma Microcell,
TELUS Mobility
Achieving profitable subscriber growth
14
2005 guidance summary
Mobility segment
updated 2005 guidance2
original 2005 targets1
Revenue
3.2 to 3.25B
no change
EBITDA
1.35 to 1.4B
1.375 to 1.4B
350 to 400M
Capex
approx. 400M
425 to 475K
Wireless Net Adds
475 to 525K
1 Provided on December 17, 2004 2 Updated May 4,
2005
Positive revisions to guidance
15
financial results
Communications segment
Change
Q1-05
Q1-04
?
4.4

1.22B
1.17B
External Revenue
9.6
?
519M
474M
EBITDA1
?
18

214M
259M
Capex
43
?
305M
214M
Cash Flow (EBITDA less capex)
1 Earnings before interest, taxes, depreciation
and amortization
Strong gains in profitability cash flow
16
revenue profile
Communications segment
Change
Q1-05
Q1-04
(M)
4.5
?
553
529
Voice Local
1.4
?
226
230
Voice Long Distance
11
?
378
340
Data
10
?
65
73
Other
?
External Revenue
1,171
1,222
4.4
3rd straight quarter of year over year wireline revenue growth driven by data
17
revenue - normalized
Communications segment
Q1-04 Q1-05 Change
Reported external revenue 1,171 1,222 ? 4.4
TQ portable subsidy - (7)
External revenue (normalized) 1,171 1,216 ? 3.8
Acquisitions - (19)
External revenue (organic) 1,171 1,197 ? 2.2
(M)
Normalized revenue growth 3.8, organic revenue growth 2.2
18
local and data revenue - normalized
Communications segment
Q1-04 Q1-05 Change
Local revenue (reported) 529 553 ? 4.5
TQ portable subsidy - (7)
CDNS - def. account - (18)
Local revenue (normalized) 529 528 ? 0.2

Data revenue (reported) 340 378 ? 11
Acquisitions - (19)
CDNS impact - data - 18
Data revenue (normalized) 340 377 ? 11
(M)
Normalized local revenue flat data growth of 11
19
network access line results
Communications segment
of network access lines lost, YoY
Q1-04
Q2-04
Q3-04
Q4-04
Q1-05
Q4-03
-0.8
-1.1
-1.2
-1.3
-1.3
-1.4
Strongest NAL result in 5 quarters despite growing competition
20
EBITDA - normalized
Communications segment
Q1-04 Q1-05 Change
Comm. EBITDA (reported) 474 519 ? 9.6
Restruc. w. r. costs 16 9
Comm. EBITDA (bef. restruc.) 490 528 ? 7.8
Regulatory impacts (retroactive)1 - (7)
Comm. EBITDA (normalized) 490 521 ? 6.3
Acquisitions - (3)
Comm. EBITDA (organic) 490M 518M ? 5.7
(M)
1 Retroactive regulatory impacts include TQ
portable subsidy and CDNS
Normalized Communications EBITDA growth of 5.7
21
non-ILEC revenue EBITDA (M)
Communications segment
Revenue
EBITDA
160
156
145
128
131
3-4M run rate
8
(3)
(14)
4
(9)
Q1-04
Q2-04
Q3-04
Q4-04
Q1-05
Positive trend with record revenue 2nd quarter of positive EBITDA benefited in part from non-recurring items
22
high-speed Internet subscriber growth
Communications segment
high-speed Internet net additions
total Internet subscribers
982K
44K
270K
dial-up 28
22K
high-speed 72
712K
Q1-04
Q1-05
High-speed Internet base up 18 in maturing market
23
revitalizing wireline growth
Communications segment

• Business
• Geographic expansion
• building high quality, recurring revenues in
  non-ILEC leveraging IP network application
  leadership
• 245M long-term contract with Govt of B.C.
• Consumer
• Future Friendly home
• continued high-speed Internet growth
• launched suite of IP applications
• Home Networking, HomeSitterTM launched in 2004
• IPTV employee trials continue
• Bundling
• bundling strategy protects legacy revenues

24
restructuring and workforce reduction costs
Communications segment
Programs initiated in 2005 Programs prior to 2005 Total
Beginning period liability - 70.7 70.7
Restructuring and workforce reduction costs 7.9 1.5 9.4
Cash payments (0.6) (21.1) (21.7)
Total liability 7.3 51.1 58.4
(M)
Expected additional restructuring costs of 91M for Q2 to Q4-05
25
2005 guidance summary
Communications segment
updated 2005 guidance2
original 2005 targets1
Revenue
4.7 to 4.75B
4.75 to 4.8B
Non-ILEC Revenue
600 to 650M
625 to 650M
EBITDA3
1.85 to 1.9B
1.875 to 1.925B
Non-ILEC EBITDA
0 to 10M
15 to 20M
950M to 1B
Capex
approx. 1B
approx. 100,000
High-Speed Net Adds
no change
1 Provided on December 17, 2004 2 Updated May 4,
2005 3 Includes 100M in restructuring
workforce reduction costs
Positive revisions to guidance
26
labour relations update

• collective bargaining with TWU resumed, Feb. 16
• tabled comprehensive offer to TWU, Apr. 13
• declared impasse and delivered notice of lockout
  measures, Apr. 18
• presented the comprehensive offer to employees,
  Apr. 21
• cash impact of offer would be up to approx. 200M
• Federal Court of Appeal denied TWU application
  challenging TELUS, Apr. 21
• CIRB dismissed application by TWU for interim
  relief, Apr. 25
• lock-out measures implemented, Apr. 25
• business remains as usual

Negotiations continue
27
share buy back update
No. of Shares Repurchased This Quarter No. of Shares Repurchased Since Inception Total Authorized of Auth. Repurchased Since Inception
Common 2.1M 2.8M 14.0M 20
Non-Voting 2.0M 3.5M 11.5M 30
Total 4.1M 6.3M 25.5M 25
Total cost 158M 236M
TELUS has repurchased 25 of shares permitted under NCIB
28
renewed bank credit facilities

• Effective May 4, 2005, TELUS entered into new
  credit facilities totaling 1.6 billion
• 800M five-year revolving term expiring May 2010
• 800M three-year revolving term expiring May 2008
• Facilities mature subsequent to 06/07 debt
  maturities
• Will replace TELUS existing 1.6B committed
  facilities
• Favourable changes to pricing extended terms
  reinforce strong liquidity position

Renewal of credit facilities reflect strong financial position
29
2005 consolidated guidance summary
updated 2005 guidance2
original 2005 targets1
Revenue
7.9 to 8.0 B
7.95 to 8.05B
EBITDA3
3.2 to 3.3B
3.25 to 3.325B
1.65 to 1.85
EPS4
1.85 to 2.05
1.3 to 1.4B
Capex
approx. 1.4B
1.2 to 1.3B
Free Cash Flow
1.25 to 1.35B
1 Provided on December 17, 2004 2 Updated May 4,
2005 3 Includes 100M in restructuring
workforce reduction costs 4 Updated guidance
includes 0.15 in 2005 for favourable settlement
of tax matters
Positive changes reflect Q1 momentum and tax settlement
30
questions?
2005 first quarter review