425 1 a2025667z425.txt FORM 425 CIBC WORLD MARKETS FIXED INCOME INVESTOR CONFERENCE [QUANTUM LEAP LOGO] [TELUS LEAP LOGO] [CLEARNET LOGO] TUESDAY, SEPTEMBER 12, 2000 [SLIDE 1] 1 TELUS CORPORATION PRESENTERS: - Barry Baptie Executive Vice President and Chief Financial Officer - Jim Drinkwater Vice President and Treasurer [SLIDE 2] [QUANTUM LEAP LOGO] 2 FORWARD LOOKING STATEMENT Some statements in this presentation and accompanying commentary 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. This presentation and the accompanying commentary do not constitute an offer of securities for sale in the United States. No securities will be offered for sale in the United States absent registration with the United States Securities and Exchange Commission, by means of a prospectus which will contain detailed information about TELUS and its management, as well as financial statements. 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. 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. [SLIDE 3] [QUANTUM LEAP LOGO] 3 TELUS CORPORATION - Dominant full-service telecom in Western Canada - Created by 1999 merger of BC Telecom and TELUS - 98% of access lines in region - 71% of LD market - 57% of wireless market - Leading ISP (354,000 subscribers) [SLIDE 4] [QUANTUM LEAP LOGO] 4 TELUS CORPORATION 1999 Results - Revenue $5.9 billion - EBITDA $2.3 billion - Net Income* $614 million - Net debt: Capital 32% * Before restructuring charges [SLIDE 5] [QUANTUM LEAP LOGO] 5 2000 ACTIONS June 1, 2000 - Purchase 70% of QuebecTel - Employee base - 1,400 route km fibre network within and connecting major cities in Quebec - 81,000 ISP customers (June 30) July 10, 2000 - Darren Entwistle President & CEO - Recent President, Cable & Wireless UK & Ireland - Experience in finance, strategy and M&A and multiple country operations in IP, data, mobility and voice August 21, 2000 - Offer to purchase Clearnet [SLIDE 6] [QUANTUM LEAP LOGO] 6 TELUS STRATEGY - Turn IP technology into compelling solutions for Canadians at home, in the workplace or on the move - Act decisively, with clarity and focus, and responsibly - Two immediate priorities - National wireless footprint - Accelerate deployment of data & IP [SLIDE 7] [QUANTUM LEAP LOGO] 7 NATIONAL WIRELESS; BUY VS. BUILD? ADVANTAGES TO BUYING: - Speed to market - Skilled employees - Spectrum richness - NPV benefit $1.5 billion NO CONTEST: IT WOULD HAVE TAKEN US THREE YEARS TO REACH THIS POSITION [SLIDE 8] [QUANTUM LEAP LOGO] 8 WHY CLEARNET? GREAT FIT - Two networks - Mike - covers 21 million POPs - PCS - covers 17 million POPs - National license 30.7 million POPs - Compatible CDMA technology - 2,600 entrepreneurial employees - Key partners: Motorola & Nextel [SLIDE 9] [QUANTUM LEAP LOGO] 9 TRANSACTION HIGHLIGHTS - Acquire 100% Clearnet shares - 50/50 cash and shares - $2.3 billion of each - $70 per Clearnet share as of August 18 - 1.636 TELUS NV shares per Clearnet share (subject to pro-ration) - Nextel and Motorola electing 100% and 75% TELUS NV shares respectively - Plan to list on U.S. exchange post transaction [SLIDE 10] [QUANTUM LEAP LOGO] 10 OPPORTUNE TIMING - Wireless penetration now at 25% - the inflexion growth point - Eliminate spectrum auction uncertainty [SLIDE 11] [QUANTUM LEAP LOGO] 11 CLEARNET PROFILE - 2,600 entrepreneurial employees - 700,000 subscribers - Leader in post-paid growth - Leader in revenue growth - Significant strategic partnerships [SLIDE 12] [QUANTUM LEAP LOGO] 12 NEW TELUS MOBILITY MARKET LEADER*: - Leading customer growth - 400,000 new customers (up 29%) - Highest wireless revenue - $1.5B - Highest ARPU - over $57 - North American spectrum leader (45-55 MHz) - Industry leading churn rate of 1.74% * pro forma for last 12 months [SLIDE 13] [QUANTUM LEAP LOGO] 13 STRATEGIC PARTNERSHIPS Verizon - 26.7% owner of TELUS (21.7% post acquisition) - Strategic marketing & technology agreement - Opportunity to exploit services, applications, technology and purchasing power - Verizon Wireless relationship: roaming purchasing power (25.5 million subscribers) Motorola - IDEN-trademark- digital technology for Mike Nextel [SLIDE 14] [QUANTUM LEAP LOGO] 14 ACQUISITION FINANCING - $7.7 billion bank bridge financing - $2.3 billion to finance cash acquisition cost - Remainder to refinance existing debt at Clearnet and TELUS and for general corporate purposes - Seeking Moody's and S&P debt ratings to supplement Canadian ratings - Take-out financing in Canadian and US debt markets as soon as practical after transaction [SLIDE 15] [QUANTUM LEAP LOGO] 15 STRUCTURING OBJECTIVES - Retain ability to finance future growth in data and Internet - Maintain investment grade rating - Maintain TELUS dividend [SLIDE 16] [QUANTUM LEAP LOGO] 16 THE NEW TELUS PRO FORMA AT JUNE 30, 2000: - $16.3 billion company - Net debt $7.6 billion - Shareholders' equity $6.8 billion [SLIDE 17] [QUANTUM LEAP LOGO] 17 FINANCIAL RATIOS 2001 Outlook Trend ------- ----- Debt: Total Capital 55-57% / / Net Debt: EBITDA - 3X / / EBITDA: Interest - 4X / / [SLIDE 18] [QUANTUM LEAP LOGO] 18 THE NEW TELUS - Substantial, stable underlying cash flow from existing business - National, spectrum-rich wireless platform from which to target industry's fastest growing sectors - Strong track record in achieving synergies from previous mergers and acquisitions - Significant strategic partnerships - Behaviour: Vision, Speed and Focus [SLIDE 19] [QUANTUM LEAP LOGO] 19 QUESTIONS & ANSWERS [SLIDE 20] [QUANTUM LEAP LOGO] 20