TELUS sets 2008 financial targets

    Record of growth in revenue and EPS to continue in 2008

    VANCOUVER, Dec. 13 /CNW/ - TELUS Corporation (TSX: T and T.A/NYSE:   TU)
today announced 2008 financial targets that reflect its continued execution of
the company's strategy focused on wireless, data and Internet growth. The
company also updated the annual guidance for 2007.
    "TELUS continues to execute on all fronts as we continue to grow revenue
and earnings and use our robust cash flow to make investments for future
growth while maintaining an orientation to return capital to our investors
through continued dividend increases and share repurchases," said Robert
McFarlane, executive vice president and CFO.
    TELUS is targeting six to eight per cent consolidated revenue growth, an
increase of approximately $550 to $700 million. EBITDA growth is expected to
be in a range of up to five per cent, while earnings per share (EPS) is
expected to be between $3.50 to $3.80. Underlying EPS growth in 2008 is
expected to be seven to 16 per cent, when adjusted to exclude the positive tax
adjustments and the non-cash charge for introducing the beneficial cash
settlement feature for share options that impacted the first nine-months of
    Following significant annual increases in each of the past three years,
TELUS recently announced a fourth consecutive annual increase of 20 per cent
in the company's quarterly dividend to 45 cents per share commencing on
January 1, 2008. In addition, TELUS has repurchased 12.4 million shares for
$697 million to the end of November 2007. Since inception of the initial
normal course issuer bid in December 2004, TELUS has repurchased 51.8 million
shares for an outlay of $2.47 billion.
    Today TELUS announced its intention to again renew a normal course issuer
bid for the potential repurchase of up to 20 million shares (eight million
common shares and 12 million non-voting shares) over the next 12 months,
subject to acceptance by the Toronto Stock Exchange.

    The 2008 financial targets and updated 2007 guidance are as follows:

                                 2008          Latest 2007
                                Targets         Guidance        Change(1)
      Revenues            $9.6 to            $9.05 to
                           9.8 billion        9.1 billion        6 to 8%
       (as adjusted)(3)   $3.8 to            $3.725 to
                           3.95 billion       3.775 billion      1 to 5%
      Earnings per share
       (as adjusted)(3)   $3.50 to 3.80      $3.55 to 3.65(3)  (3) to 6%
      Earnings per share
       (excluding tax
       impacts)(4)        $3.50 to 3.80      $3.23 to 3.33(4)   7 to 16%
      Capital             approx.            approx.
       expenditures       $1.9 billion       $1.75 billion         9%

      Revenue             $4.975 to          $4.8 to
       (external)          5.075 billion      4.825 billion      3 to 5%
       (as adjusted)(3)   $1.725 to          $1.8 to
                           1.8 billion        1.825 billion     (5) to (1)%
      Capital                                approx.
       expenditures             -             $1.2 billion         n/a

       Internet                              approx.
       subscriber net           -             110,000              n/a

      Revenue (external)  $4.625 to          $4.25 to
                           4.725 billion      4.275 billion      9 to 11%
       (as adjusted)(3)   $2.075 to          $1.925 to
                           2.15 billion       1.95 billion       7 to 11%
      Capital                                approx.
       expenditures             -             $550 million         n/a
      Wireless                               approx.
       subscriber net           -             530,000              n/a
    (1) Annual change based on low and high-end 2008 targets compared to
        midpoint of latest 2007 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 to be approximately
        $25 million in 2007 and approximately $50 million for wireline in
    (3) EBITDA excluding cash settled share option expense of approximately
        $170 million in 2007 for introducing the net-cash settlement feature,
        of which, approximately $145 million is in wireline and approximately
        $25 million is in wireless. EPS excluding an after tax charge per
        share of approximately $0.32 for introducing the net-cash settlement
        feature for options expense.
    (4) Adjusted to also normalize for the $0.32 of positive impacts in 2007
        from the settlement of tax matters in the first nine months of 2007.

    TELUS reiterated its annual 2007 consolidated and segmented guidance set
out at the time of the release of third quarter results, with the exception of
consolidated revenue, which has been lowered by $75 million - wireline by $50
million and wireless by $25 million.
    Wireline revenue is expected to increase three to five per cent in 2008,
driven largely by data. Wireline EBITDA is expected to be down one to five per
cent as a result of continued competitive pressures, initial expenses related
to launch of growth oriented products and services, and lower profit margins.
Emergis, the subject of a $766 million takeover offer from TELUS, is assumed
to be included for 10 months in 2008.
    Wireless revenue is expected to increase nine to 11 per cent in 2008 due
to continued strong growth in wireless subscribers and increased wireless data
adoption and usage. Wireless EBITDA, is expected to increase seven to 11 per
cent in the year.
    The expected earnings per share in 2008 reflect anticipated overall
higher operating profitability, anticipated reduction in tax rates and an
expected decrease in total outstanding shares due to continued share
repurchases. The 2008 EPS growth rate is expected to be offset by increased
depreciation expense, and slightly higher financing costs related to the
acquisition of Emergis partially mitigated by lower interest rates as a result
of debt refinanced at lower rates of interest in 2007. TELUS' EPS guidance for
2007 includes 32 cents of positive impacts from the settlement of tax matters
in the first nine months. When adjusted for these tax-related factors and to
also exclude an after tax non-cash charge of 32 cents for the net cash
settlement option feature, the normalized EPS increase for 2008 is expected to
be in the range of seven to 16 per cent.
    Capital expenditures in 2008 are expected to be approximately
$1.9 billion, an increase of about $150 million. The higher level of capital
expenditures in 2008 reflects anticipated significant investments in network
infrastructure to improve broadband capabilities, development of new
applications, and high-speed wireless coverage and capacity. In addition, this
spending supports continued vibrant housing growth in Alberta and British
Columbia above the national average, and success based capital for new large
contract wins in Ontario and Quebec. The 2008 capital expenditures also
include continued phased investments in new converged billing and customer
service systems.
    TELUS continues to have 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 latest 2008 targets and
2007 guidance announced today are in compliance with these policy guidelines.
    Based on an updated review of the company's tax position, TELUS now
expects minimal cash tax payments in 2007 and 2008 with the payment of
significant cash taxes largely deferred to 2009.

    Key Assumptions & Sensitivities

    For 2008 target purposes, a number of assumptions were made including:
economic growth consistent with recent provincial and national estimates by
the Conference Board of Canada, including GDP growth of 2.8% in Canada and
above average growth in the provinces of Alberta and British Columbia; foreign
exchange rate between the Canadian dollar and U.S. dollar forecasted at
parity; increased wireline competition in both business and consumer markets,
particularly from cable TV and VoIP companies; impact from the acquisition of
Emergis starting in March; wireless industry market penetration gain of 4.5 to
5%; potential participation in AWS spectrum auction is not reflected in
capital expenditures; no new wireless competitive entrant assumed for 2008;
approximately $50 million restructuring and workforce reduction expenses (up
from approximately $25 million in 2007); statutory tax rate of approximately
31 to 32%; a discount rate of 5.5% (50 bps higher than 2007) and expected
long-term return of 7.25% for pension accounting (unchanged from 2007); and
average shares outstanding of approximately 320 million shares. EPS, cash
balances, net debt and common equity may be affected by the potential
purchases of up to 20 million TELUS shares (approximately 6% 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, 2007 (12.6 million shares were repurchased from December 20, 2006
to November 30, 2007 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

    This document contains statements about expected future events and
financial and operating results of TELUS Corporation ("TELUS" or the
"Company") that are forward-looking. By their nature, forward-looking
statements require the Company to make assumptions and are subject to inherent
risks and uncertainties. There is significant risk that the assumptions (see
key assumptions listed above), predictions and other forward-looking
statements will not prove to be accurate. Readers are cautioned not to place
undue reliance on forward-looking statements as a number of factors could
cause actual future results, conditions, actions or events to differ
materially from the targets, guidance, expectations, estimates or intentions
expressed in the forward-looking statements.
    Factors that could cause actual results to differ materially include but
are not limited to: competition(including more active price competition);
economic growth and fluctuations (including pension performance, funding and
expenses); capital expenditure levels (including possible wireless spectrum
asset purchases); financing and debt requirements (including funding
acquisition purchases, share repurchases and debt financings); tax matters
(including acceleration or deferral of required payments of significant
amounts of cash taxes); human resource developments; completion of the
announced acquisition of Emergis; business integrations and internal
reorganizations (including post-acquisition integration); technology
(including reliance on systems and information technology); regulatory
approvals (including acceptance of the share repurchase program); regulatory
developments (including the essential services proceeding, spectrum auction,
tower sharing and roaming rules, and new media proceeding); process risks
(including conversion of legacy systems and billing system integrations);
health, safety and environmental developments; litigation and legal matters;
business continuity events (including man-made and natural threats); any
prospective acquisitions or divestitures; and other risk factors discussed
herein and listed from time to time in TELUS' reports, comprehensive public
disclosure documents including the 2006 Annual Report, 2007 quarterly reports
and in other filings with securities commissions in Canada (filed on SEDAR at and the United States (filed on EDGAR at
    For further information, see Section 10: Risks and risk management in
TELUS' annual 2006 Management discussion and analysis, as well as updates
reported in section 10 of TELUS' 2007 first, second and third quarter
Management's discussion and analyses.

    About TELUS

    TELUS (TSX: T, T.A; NYSE:   TU) is a leading national telecommunications
company in Canada, with $9 billion of annual revenue and 11 million customer
connections including 5.4 million wireless subscribers, 4.4 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 more than $91 million to charitable and
non-profit organizations and volunteered more than 1.7 million hours of
service to local communities. Eight TELUS Community Boards across Canada lead
our local philanthropic initiatives. For more information about TELUS, please

For further information:

For further information: Media Relations: Allison Vale, (416) 629-6425,; Investor Relations: Robert Mitchell, (416) 279-3219,

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