Form 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of December 2002
(Commission File No. 000-24876)
TELUS Corporation
(Translation of registrant's name into English)
21st Floor, 3777 Kingsway
Burnaby, British Columbia V5H 3Z7
Canada
(Address of principal registered offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
X
Form 20-F _____ Form 40-F _____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
X
Yes _____ No _____
This Form 6-K consists of the following:
News Release dated December 16, 2002:
TELUS Updates 2002 Guidance and Sets 2003 Financial and Operating Targets
December 16, 2002
TELUS Updates 2002 Guidance and Sets 2003 Financial and Operating Targets
Vancouver, B.C. - TELUS Corporation (TSE: T and T.A / NYSE: TU) today announced
updated guidance for 2002 and 2003 financial and operating targets that reflect
the continued execution of the Company's strategy focused on wireless, data and
IP growth.
"TELUS continues to execute well towards its 2002 financial and operating
targets," said Robert McFarlane, executive vice president and CFO. Today we
have revised favourably our expectations for year-end 2002 results. The
improved 2002 outlook for profitability and cash flow reflects continued
stronger than expected wireless results as well as accelerated operational
efficiency traction in wireline operations and improved non-incumbent profit
margins in Central Canada. The positive outlook suggests TELUS could be notable
amongst its peers in the North American telecom industry for exceeding its
original profitability targets for 2002 despite incurring significant negative
regulatory impacts."
"The 2003 financial targets reflect the improving profitability, increased cash
flow and debt deleveraging at TELUS" said Robert McFarlane. "We are targeting
to achieve a significant increase in earnings per share and generate EBITDA
growth of 8 to 12% due to strong growth in wireless and data revenue, and
operating efficiency program savings. Combining this with reduced capital
expenditures is expected to allow TELUS to generate significant free cash flow
and reduce future debt leverage."
The 2003 financial targets and updated 2002 guidance on key measures are as
follows:
2003 Targets 2002 Guidance Change
______________________________________________________________________________________
Revenue $7.2 to $7.3 billion Approx. $7.0 billion 3 to 4%
EBITDA (1) $2.7 to $2.8 billion Approx. $2.5 billion 8 to 12%
Earnings per share 35 to 55 cents Approx. -75 cents $1.10 to $1.30
Earnings per share
excluding restructuring --- Approx.42 cents n/a
Capital expenditures Approx. $1.5 billion Approx.$1.7 billion -12%
______________________________________________________________________________________
(1) Earnings before Interest, Taxes, Depreciation &
Amortization before workforce reduction and restructuring costs.
For TELUS Communications, the wireline reporting segment, we are targeting 2003
revenue of between $5.0 to $5.05 billion, as compared to an estimated $5.0
billion in 2002. High speed Velocity ADSL Internet net additions are expected
to be 150 to 175 thousand in 2003 compared to approximately 200 thousand this
year. Wireline EBITDA is targeted to be $2.075 to $2.150 billion in 2003 as
compared to an estimated $2.0 billion for 2002, an increase of 4 to 5%.
Increasing EBITDA is being driven by operating efficiency savings and reduced
losses in Central Canada, partially offset by increased pension expenses and
increased impact from a full year of regulated local price reductions. We have
estimated non-incumbent revenues of approximately $575 million and negative
EBITDA of approximately $60 million for 2003 as compared to approximately $525
million and $110 million, respectively, for 2002.
For TELUS Mobility, the wireless reporting segment, we are targeting 2003
revenue of between $2.2 to $2.25 billion, as compared to an estimated $2.0
billion in 2002, growth of 10% to 13%. Wireless subscriber net additions are
expected to be 400 to 450 thousand in 2003 compared to approximately 425
thousand this year. Mobility EBITDA is targeted to be $625 to $650 million in
2003 as compared to an estimated $510 million for 2002, growth of 23 to 27%.
Both revenue and EBITDA are being driven by wireless subscriber growth of 13 to
15% and continued margin expansion from improved scale efficiencies.
Consolidated capital expenditures in 2003 are targeted at approximately $1.5
billion, a 12% decrease from 2002. TELUS Communications capital expenditures
are estimated to be approximately $1.05 billion as compared to an estimated
$1.24 billion in 2002. TELUS Mobility capital expenditures are estimated to be
approximately $450 million, as compared to an estimated $460 million in 2002.
The 2003 outlook for free cash flow (EBITDA less capital expenditures, cash
interest, cash taxes, cash dividends) is $300 to $600 million. After funding
cash workforce reduction and restructuring costs and after other cash flow
changes, the ratio of net debt to EBITDA is targeted to reduce from 3.4 times
at September 30, 2002 to about 3.0 times at December 31, 2003. Consistent with
its stated policy of de-leveraging, TELUS has set a new public target of
further reducing its net debt to EBITDA ratio to less than 2.7 times by
December 31, 2004.
Operational Efficiency Program Update
The current estimated EBITDA savings from
the operational efficiency program (OEP), which began in 2001, is approximately
$450 million in 2003 and approximately $550 million annually thereafter. The
workforce reduction and restructuring costs expected to be recorded in respect
of the OEP in 2002 and 2003 are $550 million and $20 million respectively. This
is to be based on net employee reductions of approximately 6,500 in 2002 and
2003 of which an estimated 5,000 will have departed in 2002.
As part of the efficiency program, it was previously announced that we would
close 33 of 40 retail stores in BC and Alberta and close or consolidate 47 of
66 customer contact centres. By the end of September, all 33 retail centres
were closed and to date 24 customer contact centres have been closed or
consolidated.
Key Assumptions & Sensitivities
For projection purposes we have not reflected
any potential impact from any pending regulatory decisions nor federal cabinet
appeals but do include the negative impact of the 2002 price cap decision. No
impact has been assumed for the possibility of a work stoppage. We have also
assumed economic growth consistent with recent provincial and national
estimates by the Conference Board of Canada.
We also encourage investors to read the forward looking statements below for
the various economic, competitive, regulatory and company factors that could
cause actual future financial and operating results to differ from those
currently expected.
About TELUS
TELUS (TSX: T, T.A; NYSE: TU) is the largest telecommunications
company in Western Canada and the second largest in the country. The company
provides subscribers with a full range of telecommunications products and
services including data, Internet Protocol, voice and TELUS Mobility wireless
services across Canada. TELUS is a premier founding supporter of Canada's bid
to host the 2010 Winter Games in Vancouver and Whistler. For more information
on TELUS, please visit www.telus.com
For more information, please contact:
John Wheeler, investor relations, (780) 493-7310
Robert Mitchell, investor relations, (416) 279-3219
Nick Culo, media relations, (780) 493-7236
Note: Media and investors are invited to listen to a live Webcast and view
slides from the investor conference call on the 2003 guidance at 11:00 a.m.
(EST) on Monday, December 16 by visiting the TELUS Website
www.telus.com/investorcall. A recording will also be available for listening
approximately 2 hours after the completion of the call.
FORWARD-LOOKING STATEMENTS
This news release contains statements about expected future events and
financial and operating results that are forward-looking and subject to risks
and uncertainties. TELUS' actual results, performance, or achievement could
differ materially from those expressed or implied by such statements. Such
statements are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations and may not reflect the potential
impact of any future acquisitions, mergers or divestitures. Factors that could
cause actual results to differ materially include but are not limited to:
general business and economic conditions in TELUS' service territories across
Canada and future demand for services; competition in wireline and wireless
services, including voice, data and Internet services and within the Canadian
telecommunications industry generally; levels of capital expenditures;
corporate restructurings; success of operational and capital efficiency
programs including maintenance of client service levels; successful integration
of acquisitions; network upgrades, billing system conversions, and reliance on
legacy systems; capital and operating expense savings; the impact of credit
rating changes; availability and cost of capital including renewal of credit
facilities; financial condition and credit risk of customers affecting
collectibility of receivables; ability to maintain an accounts receivable
securitization program; adverse regulatory action; attraction and retention of
key personnel; collective labour agreement negotiations and potential work
action; future costs of retirement and pension obligations; technological
advances; the final outcome of pending or future litigation; the effect of
health and safety concerns and other risk factors described and listed from
time to time in TELUS' reports, TELUS' comprehensive public disclosure
documents, including the Annual Information Form, and in other filings with
securities commissions in Canada and the U.S.
The forward-looking statements contained in this news release represent TELUS'
expectations as of December 16, 2002 and accordingly, are subject to change
after such date. 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.
- 30 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: December 16, 2002
TELUS Corporation
"James W. Peters"
_____________________________
Name: James W. Peters
Title: Corporate Secretary