TELUS sets 2009 financial targets

    Building on strength in 2009

    VANCOUVER, Dec. 16 /CNW/ - TELUS Corporation (TSX: T and T.A / NYSE: TU)
today announced 2009 financial targets that reflect its continued execution of
the company's national growth strategy focused on wireless and data. The
company also updated its annual guidance for 2008.
    "We are targeting earnings per share excluding tax adjustments to grow by
up to 10 per cent next year," said Robert McFarlane, executive vice-president
and CFO. "The 2009 targets announced today reflect an overall trend of
building on strength. A combination of TELUS' strong balance sheet and cash
flow generation continues to allow the company to return significant capital
to its shareholders, including, a fifth consecutive increase in the dividend,
as well as the substantial reinvestment of capital into the business. This
internal investment enables us to exploit our large exposure to the growing
Canadian wireless business and broadband wireline opportunities, including
business growth in Central Canada, all of which ultimately drive rewarding and
profitable future growth and value creation."
    TELUS is pleased to confirm today that it has received commitments from a
Canadian bank syndicate to renew for another year a $700 million 364-day bank
facility. This facility complements a $2 billion bank facility, which does not
expire until 2012. The renewal of this undrawn $700 million facility
reinforces the strength of TELUS' balance sheet and illustrates the company's
ongoing ability to access capital.
    For 2009, TELUS is targeting four to six per cent consolidated revenue
growth, an increase of approximately $375 to $625 million. EBITDA growth is
expected to be in a range of up to four per cent, moderated by increased
pension expense in 2009 due to equity market weakness in 2008. Earnings per
share (EPS) are targeted to be $3.40 to $3.70 and similar to 2008 EPS, which
was positively impacted by tax adjustments. Excluding these positive tax
adjustments, EPS is targeted to increase up to 10 per cent.
    TELUS recently announced a fifth consecutive annual increase of 5.6 per
cent in the company's quarterly dividend to 47.5 cents per share, commencing
on January 2, 2009. Today, TELUS announced its intention to again renew its
normal course issuer bid to allow for the possibility of repurchasing up to
eight million shares (four million common shares and four million non-voting
shares) over the next 12 months, subject to acceptance by the Toronto Stock
Exchange.

    The 2009 financial targets and updated 2008 guidance are as follows:

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                             2009            Latest 2008
                           Targets             Guidance           Change(1)
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    Consolidated
      Revenues          $10.025 to         approx.
                         10.275 billion     $9.650 billion          4 to 6%
      EBITDA(2)         $3.75 to            $3.725 to
                         3.9 billion        3.8 billion             0 to 4%
      Earnings per
       share            $3.40 to $3.70     $3.45 to 3.60          (4) to 5%
      Earnings per
       share (excluding
       tax impacts)(3)  $3.40 to $3.70     $3.30 to 3.45(3)        1 to 10%
      Capital
       expenditures     approx.            approx.
                         $2.05 billion      $1.825 billion              12%

    Wireless
      Revenue
       (external)       $4.975 to          approx.
                         5.1 billion        $4.625 billion         8 to 10%
      EBITDA(2)         $2.1 to             $1.975 to
                         2.175 billion      2.025 billion           5 to 9%

    Wireline
      Revenue           $5.05 to           approx.
       (external)        5.175 billion      $5.025 billion          0 to 3%
      EBITDA(2)         $1.65 to           $1.75 to
                         1.725 billion      1.775 billion       (6) to (2)%

    (1) Annual change based on low and high-end 2009 targets compared to
        midpoint of latest 2008 guidance.
    (2) Earnings Before Interest, Taxes, Depreciation and Amortization
        (EBITDA) is defined as Operating revenues less Operations expense
        less restructuring and workforce reduction costs. Restructuring and
        workforce reduction costs are estimated at approximately
        $55-60 million in 2008, and approximately $50-75 million in 2009.
    (3) Adjusted to normalize for the estimated $0.15 per share of positive
        impacts in 2008 from the settlement of tax matters.

    Also today, TELUS reiterated its EBITDA and EPS 2008 annual guidance as
being unchanged while lowering its segmented and consolidated revenue outlook.
Consolidated capital expenditures were reduced by $75 million due to a
deferral of spending into 2009.
    Reflecting the organization's success in enhancing its operating
efficiency program in recent months, the 2008 estimate for restructuring costs
has been increased to approximately $55 to 60 million (previously set at
approximately $50 million), and has been estimated at between $50 and 75
million for 2009.
    TELUS wireless revenue is forecast to increase eight to 10 per cent in
2009 due to continued growth in wireless subscribers, increased smartphone
adoption and increased wireless data adoption and usage. Wireless EBITDA is
expected to increase five to nine per cent next year.
    Wireline revenue is expected to grow up to three per cent in 2009, driven
largely by data. Wireline EBITDA is expected to be down two to six per cent as
a result of increased pension expenses, upfront expenses associated with
growth services, and the ongoing commitment to efficiency initiatives.
    TELUS expects its 2009 EPS will be impacted by slightly increased
depreciation expense and higher financing costs related to a higher average
debt level due to payment for AWS wireless spectrum in the third quarter of
2008. When EPS guidance for 2008 is adjusted to exclude estimated positive
impacts from the settlement of tax matters of 15 cents, the underlying growth
in 2009 EPS over 2008 is one to 10 per cent.
    Capital expenditures in 2009 are forecast to be approximately $2.05
billion, in part due to a deferral of $75 million of capital expenditures
previously expected to be recorded in 2008. The higher level of capital
expenditures in 2009 also reflects significant investment in TELUS' shared
national next generation wireless network build, investments in network
infrastructure to improve wireline broadband capabilities, and the development
of new applications. In addition, this spending will support the capital
required to implement new large enterprise contracts in Ontario and Quebec
that TELUS expects will generate significant revenue in future years. Capital
expenditures also include investments in certain cost efficiency initiatives.
    TELUS is reaffirming the same long-term financial policy guidelines
including net debt to EBITDA of 1.5 to 2.0 times and a dividend payout ratio
guideline of 45 to 55 per cent of sustainable net earnings. The 2008 guidance
and 2009 targets announced today are both expected to ensure compliance with
these guidelines.

    Key Assumptions & Sensitivities

    For 2009 target purposes, a number of assumptions were made including:
ongoing wireline competition in both business and consumer markets,
particularly from cable TV and VoIP companies; wireless industry market
penetration gain of approximately 4.5%; downward pressure on wireless average
revenue per unit; new competitive wireless entry beginning in the fourth
quarter of 2009 with most entrants starting in 2010; approximately $50 to $75
million restructuring and workforce reduction expenses; statutory tax rate of
approximately 30 to 31%; cash taxes of approximately $320 to $350 million;
foreign exchange rate between the U.S. dollar and Canadian dollar forecasted
at $0.80 USD/CAD; and a pension accounting discount rate of 7.0% (150 bps
higher than 2007) and expected long-term return of 7.25% (unchanged from
2008). EPS, cash balances, net debt and common equity may be affected by the
potential purchase of up to 8 million TELUS shares (approximately 2.5% of
outstanding total shares) over a 12 month period under the normal course
issuer bid, subject to acceptance by the Toronto Stock Exchange, which could
commence on December 20, 2008 (6.7 million shares were repurchased from
December 20, 2007 to November 30, 2008 under the previous program).
    We encourage investors to read the forward looking statements below, and
in related disclosures, for the various economic, competitive, regulatory and
company factors that could cause actual future financial and operating results
to differ from those currently expected.

    Forward-looking statements

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    This document contains forward-looking statements that require
assumptions about expected future events and financial and operating results
that are subject to inherent risks and uncertainties. There is significant
risk that assumptions, predictions and other forward-looking statements will
not prove to be accurate. Readers are cautioned not to place undue reliance on
forward-looking statements and assumptions as a number of factors could cause
actual future results, conditions, actions or events to differ materially from
the targets, expectations, estimates or intentions expressed. Except as
required by law, TELUS disclaims any intention or obligation to update or
revise forward-looking statements, and reserves the right to change, at any
time at its sole discretion, its current practice of updating annual guidance.
    Factors that could cause actual results to differ materially include, but
are not limited to: competition (including more active price competition and
the likelihood of new wireless competitors beginning to offer services in 2009
following the 2008 AWS spectrum auction); economic growth and fluctuations
(including the global credit crisis, and pension performance, funding and
expenses); capital expenditure levels (increased in 2009 and potentially
future years by the Company's fourth generation (4G) wireless deployment
strategy and any new Industry Canada wireless spectrum auctions); financing
and debt requirements (including ability to carry out refinancing activities
and fund share repurchases); tax matters (including acceleration or deferral
of required payments of significant amounts of cash taxes); human resource
developments; business integrations and internal reorganizations (including
post-acquisition integration of Emergis); technology (including reliance on
systems and information technology, broadband and wireless technology options
and choice of suppliers, expected technology and evolution path and transition
to 4G technology, expected future benefits and performance of HSPA (high speed
packet access) / LTE (long-term evolution) wireless technology, successful
implementation of the network build and sharing arrangement with Bell Canada
to achieve cost efficiencies and reduce deployment risks, successful
deployment and operation of new wireless networks and successful introduction
of new products, services and supporting systems); regulatory approvals and
developments (including interpretation and application of tower sharing and
roaming rules, the design and impact of future spectrum auctions, the new
media proceeding and possible changes to foreign ownership restrictions);
process risks (including conversion of legacy systems and billing system
integrations); health, safety and environmental developments; litigation and
legal matters; business continuity events (including manmade and natural
threats); any prospective acquisitions or divestitures; and other risk factors
discussed herein and listed from time to time in TELUS' reports and public
disclosure documents, including its annual report, annual information form,
and other filings with securities commissions in Canada (on www.sedar.com) and
in its filings in the United States, including Form 40-F (on EDGAR at
www.sec.gov).
    For further information, see Section 10: Risks and risk management in
TELUS' 2007 annual Management's discussion and analysis, as well as updates
reported in section 10 of TELUS' 2008 quarterly Management's discussion and
analyses.
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    About TELUS

    TELUS (TSX: T, T.A; NYSE: TU) is a leading national telecommunications
company in Canada, with $9.5 billion of annual revenue and 11.5 million
customer connections including 6 million wireless subscribers, 4.3 million
wireline network access lines and 1.2 million Internet subscribers. TELUS
provides a wide range of communications products and services including data,
Internet protocol (IP), voice, entertainment and video. Committed to being
Canada's premier corporate citizen, we give where we live. Since 2000, TELUS
and our team members have contributed $113 million to charitable and
not-for-profit organizations and volunteered more than 2.1 million hours of
service to local communities. Nine TELUS Community Boards across Canada lead
our local philanthropic initiatives. For more information about TELUS, please
visit telus.com.

For further information: Media Relations: Allison Vale, (416) 629-6425,
allison.vale@telus.com; Investor Relations: Robert Mitchell, (416) 279-3219,
ir@telus.com