425 1 a425.txt FORM 425 DEAL AT A GLANCE LEADING THE CONVERGENCE REVOLUTION This transaction is a Quantum Leap towards becoming Canada's leading player in converging voice, data, IP and mobility services into solutions that deliver competitive advantage to our customers. FOCUSED ON WIRELESS DATA, IP MARKETS Wireless and data applications are the fastest growing segments of the telecom market: Wireless revenues rose from just 4.5% of total telecom revenues in 1990 to 15% in 1999 - Wireless revenues in 1999 totaled $4.2 billion, up 11% from the previous year - Web-enabled phones are expected to surpass PCs as the preferred method of accessing the Internet by 2004 THE RIGHT TIME - The Canadian wireless penetration rate is at the inflection point on the growth curve - Canada's wireless penetration is currently 25%, up 5 points from 1999 - Uncertainty inherent to fall spectrum auction has been eliminated - Opportunity to build a strong national wireless company before relaxation of restrictions on foreign ownership FINANCIAL FLEXIBILITY - Our cash flow and strong balance sheet give us the flexibility and access to capital to support our data, IP and mobility growth ambitions A GREAT FIT - We share everything from a passion for wireless, a focus on growth and compatible technology to a belief that culture delivers competitive advantage - We offer the country's best wireline and wireless networks and products, in most key markets - We have a greatly enhanced ability to drive a larger share of the mobility voice, data and Internet markets on a national basis - We have gained increased exposure to high growth markets, and we have expanded both geographically and in our product lines A BOLD NEW FORCE Expect to see the TELUS team making similar bold moves in the future. Specifics will differ, but our behaviour will be defined by certain hallmarks: - We will act quickly and decisively in a manner that is consistent with our strategy - We will focus relentlessly on building our competitive position in the high-growth, high-margin areas of data, IP and mobility - We will continue to pay careful attention to the economic benefits and financial implications of our actions TELUS CORPORATION PRO FORMA CONSOLIDATED BALANCE SHEET AS AT JUNE 30, 2000 (MILLIONS OF DOLLARS) (UNAUDITED)

TELUS Pro forma Combined Corporation Clearnet Combined Adjustments Consolidated ----------- --------- -------- ----------- ------------ 2(a) 2(b) ASSETS Current assets Cash and short-term deposits $ 101.4 $ 299.5 $ 400.9 $ -- $ 400.9 Accounts receivable 870.2 73.5 943.7 -- 943.7 Inventories 51.5 39.2 90.7 -- 90.7 Current portion of future income taxes 182.4 -- 182.4 -- 182.4 Prepaid expenses and other 143.6 40.4 184.0 -- 184.0 -------- --------- --------- -------- --------- 1,349.1 452.6 1,801.7 -- 1,801.7 -------- --------- --------- -------- --------- Property, plant and equipment, net 6,223.7 1,207.3 7,431.0 -- 7,431.0 -------- --------- --------- -------- --------- Other assets Future income taxes 404.5 -- 404.5 740.0 1,144.5 Goodwill 462.0 -- 462.0 4,833.6 5,295.6 Investments and other 255.2 296.3 551.5 97.3 648.8 -------- --------- --------- -------- --------- 1,121.7 296.3 1,418.0 5,670.9 7,088.9 -------- --------- --------- -------- --------- $8,694.5 $ 1,956.2 $10,650.7 $5,670.9 $16,321.6 -------- --------- --------- -------- --------- -------- --------- --------- -------- --------- LIABILITIES Current liabilities Bank indebtedness $ -- $ -- $ -- $ -- $ -- Accounts payable and accrued liabilities 865.3 203.7 1,069.0 -- 1,069.0 Dividends payable 83.7 -- 83.7 -- 83.7 Advanced billings and customer deposits 167.6 -- 167.6 -- 167.6 Short-term obligations 1,137.4 -- 1,137.4 -- 1,137.4 -------- --------- --------- -------- --------- 2,254.0 203.7 2,457.7 -- 2,457.7 -------- --------- --------- -------- --------- Long-term debt 1,727.1 2,428.8 4,155.9 2,690.2 6,846.1 -------- --------- --------- -------- --------- Other long-term liabilities 153.2 -- 153.2 -- 153.2 -------- --------- --------- -------- --------- Non-controlling interest 83.4 -- 83.4 -- 83.4 -------- --------- --------- -------- --------- SHAREHOLDERS' EQUITY (DEFICIENCY) Common equity Share capital 2,790.3 914.2 3,704.5 1,390.2 5,094.7 Retained earnings (deficit) 1,616.8 (1,735.6) (118.8) 1,735.6 1,616.8 -------- --------- --------- -------- --------- 4,407.1 (821.4) 3,585.7 3,125.8 6,711.5 -------- --------- --------- -------- --------- Convertible debentures -- 145.1 145.1 (145.1) -- -------- --------- --------- -------- --------- Preference and preferred shares 69.7 -- 69.7 -- 69.7 -------- --------- --------- -------- --------- $8,694.5 $ 1,956.2 $10,650.7 $5,670.9 $16,321.6 -------- --------- --------- -------- --------- -------- --------- --------- -------- ---------

THESE PRO FORMA STATEMENTS ARE DRAFT ONLY AND MAY VARY FROM THE PRO FORMA STATEMENTS TO BE INCLUDED IN THE TAKE-OVER BID CIRCULAR TELUS CORPORATION PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDING JUNE 30, 2000 (MILLIONS OF DOLLARS) (UNAUDITED)

TELUS Pro forma Combined Corporation Clearnet Combined Adjustments Consolidated ----------- --------- -------- ----------- ------------ 2(a) 2(b,c) OPERATING REVENUES Wireless $ 521.2 $ 244.5 $ 765.7 $ -- $ 765.7 Other 2,485.5 -- 2,485.5 -- 2,485.5 -------- ------- -------- ------- -------- 3,006.7 244.5 3,251.2 -- 3,251.2 -------- ------- -------- ------- -------- OPERATIONS EXPENSE Wireless 322.4 327.4 649.8 -- 649.8 Other 1,454.6 -- 1,454.6 -- 1,454.6 -------- ------- -------- ------- -------- 1,777.0 327.4 2,104.4 -- 2,104.4 -------- ------- -------- ------- -------- EBITDA Wireless 198.8 (82.9) 115.9 -- 115.9 Other 1,030.9 -- 1,030.9 -- 1,030.9 -------- ------- -------- ------- -------- 1,229.7 (82.9) 1,146.8 -- 1,146.8 Depreciation and amortization 548.3 113.5 661.8 -- 661.8 -------- ------- -------- ------- -------- OPERATING INCOME 681.4 (196.4) 485.0 -- 485.0 -------- ------- -------- ------- -------- Other income, net 10.7 -- 10.7 -- 10.7 Financing costs 103.1 125.4 228.5 100.4 328.9 INCOME BEFORE INCOME TAXES AND NON-CONTROLLING INTEREST 589.0 (321.8) 267.2 (100.4) 166.8 -------- ------- -------- ------- -------- Income taxes 255.7 1.7 257.4 (188.4) 69.0 -------- ------- -------- ------- -------- INCOME BEFORE NON-CONTROLLING INTEREST 333.3 (323.5) 9.8 88.0 97.8 -------- ------- -------- ------- -------- Non-controlling interest 2.9 -- 2.9 -- 2.9 -------- ------- -------- ------- -------- NET INCOME BEFORE GOODWILL CHARGES 330.4 (323.5) 6.9 88.0 94.9 -------- ------- -------- ------- -------- Goodwill amortization 3.0 -- 3.0 120.8 123.8 -------- ------- -------- ------- -------- NET INCOME 327.4 (323.5) 3.9 (32.8) (28.9) -------- ------- -------- ------- -------- Preference and preferred share dividends 1.8 -- 1.8 -- 1.8 -------- ------- -------- ------- -------- COMMON SHARE INCOME $ 325.6 $(323.5) $ 2.1 $ (32.8) $ (30.7) -------- ------- -------- ------- -------- -------- ------- -------- ------- -------- Earnings (loss) per share Before goodwill charges $ 1.39 $ (5.57) $ 0.32 Net $ 1.37 $ (5.57) $ (0.11) Average Class A equivalent shares outstanding (millions) 58.1 Average Common shares outstanding (millions) 236.9 53.9 290.8 Effective tax rate 43.4% -0.5% 41.4%

TELUS CORPORATION NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying unaudited pro forma financial statements for TELUS Corporation have been prepared in accordance with generally accepted accounting principles and are based on: - the unaudited consolidated financial statements of TELUS Corporation ("TELUS") for the six months ended June 30, 2000; and - the unaudited consolidated financial statements of Clearnet Communications Inc. (Clearnet) for the six months ended June 30, 2000. The pro forma consolidated financial statements are not necessarily indicative of the results that actually would have occurred, or the results expected in future periods, had the events reflected herein occurred on the dates indicated. 2. ASSUMPTIONS AND ADJUSTMENTS The pro forma consolidated financial statements have been prepared from the following assumptions and adjustments: (a) COMBINATION ASSUMPTIONS The pro forma statement of income reflects the purchase as though it had occurred on January 1, 2000. The pro forma balance sheet reflects the purchase as if it had occurred on June 30, 2000. - The purchase transaction comprises the acquisition of all the outstanding shares of Clearnet, including exercisable options and converted debentures, for $2,304.3 million in cash and 53.85 million Non-Voting Common shares of TELUS. The total purchase price (including an estimated $30 million of related acquisition costs) is $4,638.7 million. The cash component of the purchase will be funded by debt issued by TELUS for approximately $2,334.3 million. The 53.85 million TELUS Common Non-Voting shares are assumed to have been issued at $42.79 each for total consideration of $2,304.4 million. (b) PRO FORMA ADJUSTMENTS BALANCE SHEET - A future income tax asset of $740.0 million has been recorded representing the value of tax loss carry forwards in Clearnet that will be available to reduce future taxable income in TELUS after certain reorganization arrangements have been completed. - Other assets have increased by $97.3 million of debt issuance costs associated with replacement debt for Clearnet. - Long-term debt has increased by: (1) $2,334.3 million borrowed to fund part of the purchase; and (2) a $355.9 million estimated fair market value adjustment to Clearnet debt, which is based upon the company's debt repayment plans and the expected market rates for debt with similar terms and conditions. - Common equity increased by: (1) $2,304.4 million from TELUS equity issue; (2) $821.4 million for the elimination of Clearnet common share capital and retained deficit; and (3) $145.1 million for the elimination of Clearnet convertible debentures, which are assumed to be converted into common equity. - Goodwill has been recorded for the purchase price in excess of net tangible assets, including the future income tax asset. INCOME STATEMENT - Financing costs have increased by: (1) $93.4 million as a result of additional interest expense for the purchase; and (2) $7.0 million for amortization of the deferred financing charge. - The income tax adjustment reflects the recording of future income tax benefit on the current year loss, as well as a reduction in taxes associated with the increased financing costs. The effective tax rate assumed was 44.6%. - Amortization of goodwill of $120.8 million associated with the purchase has been recorded, based upon an amortization period of 20 years. (c) OTHER - No other adjustments have been made to operating revenues and expenses for any changes expected to occur in future years as a result of this reorganization. FORWARD LOOKING STATEMENTS SOME STATEMENTS IN THIS DOCUMENT LOOK FORWARD IN TIME AND DEAL WITH OTHER THAN HISTORICAL OR CURRENT FACTS FOR TELUS AND CLEARNET. SUCH STATEMENTS ARE QUALIFIED IN THEIR ENTIRETY BY THE INHERENT RISKS AND UNCERTAINTIES SURROUNDING FUTURE EXPECTATIONS, INCLUDING BUT NOT LIMITED TO, THE RISKS ASSOCIATED WITH: GENERAL BUSINESS CONDITIONS IN CANADA AND THE COMPANIES' SERVICE TERRITORIES IN CANADA; COMPETITION ON WIRELESS SERVICES (CELLULAR), LOCAL AND LONG DISTANCE SERVICES, DATA AND INTERNET SERVICES AND WITHIN THE CANADIAN TELECOMMUNICATIONS INDUSTRY GENERALLY; ADVERSE REGULATORY ACTION; TECHNOLOGICAL CHANGE; TAXATION; AVAILABILITY OF SUFFICIENT FUNDING; AND GENERATION OF OPERATING CASHFLOW SUFFICIENT TO PROVIDE FINANCIAL VIABILITY. FOR ADDITIONAL INFORMATION WITH RESPECT TO CERTAIN OF THESE AND OTHER FACTORS, SEE THE REPORTS FILED BY TELUS AND CLEARNET WITH CANADIAN PROVINCIAL SECURITIES COMMISSIONS AND THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. TELUS AND CLEARNET DISCLAIM ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE OFFER TO EXCHANGE/PROSPECTUS, THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 AND OTHER OFFER DOCUMENTATION REGARDING THE TRANSACTION TO BE FILED WITH CANADIAN PROVINCIAL SECURITIES COMMISSIONS AND THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, AS THEY WILL CONTAIN IMPORTANT INFORMATION. SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THE OFFER TO EXCHANGE/PROSPECTUS (WHEN AVAILABLE) AND OTHER RELATED DOCUMENTS FILED BY TELUS AND CLEARNET AT THE SEC'S WEB SITE AT WWW.SEC.GOV AND THE SEDAR WEB SITE AT WWW.SEDAR.COM. WHEN AVAILABLE, THE OFFER TO EXCHANGE/PROSPECTUS AND THE OTHER DOCUMENTS MAY ALSO BE OBTAINED FROM TELUS, ATTENTION: TELUS CORPORATION INVESTOR RELATIONS, FLOOR 30-D, 10020-100 STREET, EDMONTON, AB T5J 0N5.